Company Reports

We intend to drop coverage of Accent on or around Aug. 14, 2026. We provide analyst research and ratings on over 1,600 companies globally, and periodically adjust our coverage according to investor interest and staffing.

We intend to cease coverage of Accent on or around Aug. 14, 2026.

United Kingdom-based Frasers Group announced an unconditional, on-market takeover bid to acquire Accent shares at AUD 0.65 per share, thereby increasing its stake above 23%. The offer is effective immediately and closes on July 30, 2026. Shares rallied 15% on the day.

In the first 18 weeks of the second half of fiscal 2026, Accent's like-for-like sales fell 1% on last year. Management cut full-year EBIT guidance by 8% at the midpoint, citing a sharp deterioration in April trading following geopolitical escalation.

In contrast to many of its brick-and-mortar retailing peers, we think Accent can keep rolling out stores at an above-population-growth pace over the medium term. Accent is disciplined in its approach to new stores, targeting an aftertax return on investment of at least 20%, significantly above our 10% weighted average cost of capital, or WACC, assumption. We think Accent’s rollout will be driven by monobranded stores under its exclusive distribution agreements with trendy labels such as Hoka, and its vertically owned banners Nude Lucy and Stylerunner. New stores will likely be in outer metro and regional areas. While these stores are typically lower turnover, lower rent means that margins are comparable with metro locations. As the store network expands, sales should increasingly shift away from wholesale and toward the higher margin, albeit more capital-intensive, retail channel. Channel mix shift toward retail provides some support to margins over the medium term. We forecast a midcycle EBIT margin of 8%, reflecting our assessment of the industry's pricing dynamics and the long-run competitive environment.

Accent's total sales rose 2.4% in the first half of fiscal 2026, with like-for-like sales up 0.9%. EBIT of AUD 56.5 million fell 30% on last year, meeting November's downgraded guidance. Shares surged 18%.

In contrast to many of its brick-and-mortar retailing peers, we think Accent can keep rolling out stores at an above-population-growth pace over the medium term. Although Accent’s store network has expanded rapidly, more than doubling in the five years to fiscal 2023, we don’t see evidence of deteriorating store economics. Accent is disciplined in its approach to new stores, targeting an aftertax return on investment of at least 20%, significantly above our 10.4% weighted average cost of capital, or WACC, assumption. We think Accent’s rollout will be driven by monobranded stores under its exclusive distribution agreements with trendy labels such as Hoka, and its vertically owned banners Nude Lucy and Stylerunner. New stores will likely be in outer metro and regional areas. While these stores are typically lower turnover, lower rent means that margins are comparable with metro locations. As the store network expands, sales should increasingly shift away from wholesale and toward the higher margin, albeit more capital-intensive, retail channel. Channel mix shift toward retail should see a modest uplift in group margins, to around 11% by the end of our explicit forecast period from 8% in fiscal 2025.

In contrast to many of its brick-and-mortar retailing peers, we think Accent can keep rolling out stores at an above-population-growth pace over the medium term. Although Accent’s store network has expanded rapidly, more than doubling in the five years to fiscal 2023, we don’t see evidence of deteriorating store economics. Accent is disciplined in its approach to new stores, targeting an aftertax return on investment of at least 20%, significantly above our 10.4% weighted average cost of capital, or WACC, assumption. We think Accent’s rollout will be driven by monobranded stores under its exclusive distribution agreements with trendy labels such as Hoka, and its vertically owned banners Nude Lucy and Stylerunner. New stores will likely be in outer metro and regional areas. While these stores are typically lower turnover, lower rent means that margins are comparable with metro locations. As the store network expands, sales should increasingly shift away from wholesale and toward the higher margin, albeit more capital-intensive, retail channel. Channel mix shift toward retail should see a modest uplift in group margins, to around 11% by the end of our explicit forecast period from 8% in fiscal 2024.

In the first 20 weeks of fiscal 2026, Accent's like-for-like sales are down 0.4% on last year. Gross margins fell 160 basis points on heavy discounting. Management now expects fiscal 2026 EBIT of AUD 85 million-AUD 95 million. Shares fell 13%.

In contrast to many of its brick-and-mortar retailing peers, we think Accent can keep rolling out stores at an above-population-growth pace over the medium term. Although Accent’s store network has expanded rapidly, more than doubling in the five years to fiscal 2023, we don’t see evidence of deteriorating store economics. Accent is disciplined in its approach to new stores, targeting an aftertax return on investment of at least 20%, significantly above our 10.4% weighted average cost of capital, or WACC, assumption. We think Accent’s rollout will be driven by monobranded stores under its exclusive distribution agreements with trendy labels such as Hoka, and its vertically owned banners Nude Lucy and Stylerunner. New stores will likely be in outer metro and regional areas. While these stores are typically lower turnover, lower rent means that margins are comparable with metro locations. As the store network expands, sales should increasingly shift away from wholesale and toward the higher margin, albeit more capital-intensive, retail channel. Channel mix shift toward retail should see a modest uplift in group margins, to around 11% by the end of our explicit forecast period from 8% in fiscal 2024.

Accent's fiscal 2025 EBIT of AUD 110 million was flat on last year. Guidance for fiscal 2026 is high-single-digit EBIT growth. Like-for-like sales improved in the first seven weeks of fiscal 2026, but only modestly.

Household incomes are growing in real terms after a period of rampant inflation. With inflation back within the Reserve Bank of Australia’s target range, the focus is shifting to keeping the job market in good shape. Monetary settings are slightly restrictive, providing room for more easing.

In the first 23 weeks of second-half fiscal 2025, Accent's like-for-like sales are down 1% from a year ago and gross margins contracted 80 basis points due to discounting. Management expects fiscal 2025 EBIT between AUD 108 million and AUD 111 million. Shares dived 25% on the update.

In contrast to many of its brick-and-mortar retailing peers, we think Accent can keep rolling out stores at an above-population-growth pace over the medium term. Although Accent’s store network has expanded rapidly, more than doubling in the five years to fiscal 2023, we don’t see evidence of deteriorating store economics. Accent is disciplined in its approach to new stores, targeting an aftertax return on investment of at least 20%, significantly above our 10.4% weighted average cost of capital, or WACC, assumption. We think Accent’s rollout will be driven by monobranded stores under its exclusive distribution agreements with trendy labels such as Hoka, and its vertically owned banners Nude Lucy and Stylerunner. New stores will likely be in outer metro and regional areas. While these stores are typically lower turnover, lower rent means that margins are comparable with metro locations. As the store network expands, sales should increasingly shift away from wholesale and toward the higher margin, albeit more capital-intensive, retail channel. Channel mix shift toward retail should see a modest uplift in group margins, to around 11% by the end of our explicit forecast period from 8% in fiscal 2024.

Tariffs are softening Australian consumer sentiment and investors are preferring defensive over cyclical retailers. Since sweeping US tariffs were announced April 2, our Morningstar Australia Consumer Defensive Index is up 3%, but the Morningstar Australia Consumer Cyclical Index is flat.

In contrast to many of its brick-and-mortar retailing peers, we think Accent can keep rolling out stores at an above-population-growth pace over the medium term. Although Accent’s store network has expanded rapidly, more than doubling in the five years to fiscal 2023, we don’t see evidence of deteriorating store economics. Accent is disciplined in its approach to new stores, targeting an aftertax return on investment of at least 20%, significantly above our 10.4% weighted average cost of capital, or WACC, assumption. We think Accent’s rollout will be driven by monobranded stores under its exclusive distribution agreements with trendy labels such as Hoka, and its vertically owned banners Nude Lucy and Stylerunner. New stores will likely be in outer metro and regional areas. While these stores are typically lower turnover, lower rent means that margins are comparable with metro locations. As the store network expands, sales should increasingly shift away from wholesale and toward the higher margin, albeit more capital-intensive, retail channel. Channel mix shift toward retail should see a modest uplift in group margins, to around 11% by the end of our explicit forecast period from 8% in fiscal 2024.

Accent has signed an exclusive agreement with the United Kingdom-based Frasers Group to launch Sports Direct in Australia and New Zealand. Accent will issue AUD 60 million in new shares at AUD 1.72 to Frasers, increasing shares outstanding by 6%, to fund the initial expansion.

Narrow-moat Accent's first-half fiscal 2025 result met guidance, with like-for-like sales up 3% on last year and EBIT up 12% to AUD 81 million. A trading update for the first seven weeks of the second half showed like-for-like sales growth had slowed a touch, to 2%. However, we expect conditions to pick up in the final months of the fiscal year due to tax cuts, RBA cash rate relief, and ongoing strength across the labor market. We maintain our full-year like-for-like sales growth forecast of 4%. Our earnings forecasts are unchanged, and our fair value estimate lifts 4% to AUD 2.50 due to the time value of money. Shares look moderately undervalued.

In contrast to many of its brick-and-mortar retailing peers, we think Accent can keep rolling out stores at an above-population-growth pace over the medium term. Although Accent’s store network has expanded rapidly, more than doubling in the five years to fiscal 2023, we don’t see evidence of deteriorating store economics. Accent is disciplined in its approach to new stores, targeting an aftertax return on investment of at least 20%, significantly above our 10.4% weighted average cost of capital, or WACC, assumption. We think Accent’s rollout will be driven by monobranded stores under its exclusive distribution agreements with trendy labels such as Hoka, and its vertically owned banners Nude Lucy and Stylerunner. New stores will likely be in outer metro and regional areas. While these stores are typically lower turnover, lower rent means that margins are comparable with metro locations. As the store network expands, sales should increasingly shift away from wholesale and toward the higher margin, albeit more capital-intensive, retail channel. Channel mix shift toward retail should see a modest uplift in group margins, to around 11% by the end of our explicit forecast period from 8% in fiscal 2024.

Retail spending is rebounding due to a larger workforce, higher wages, and meaningful fiscal stimulus. Discretionary categories are benefiting more than defensives from rising household incomes.