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Accent Group Ltd AX1

Morningstar Rating
A$2.19 −0.03 (1.35%)
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Company Report

Accent Group: Resilient End to a Tough Year

Narrow-moat Accent’s trading update reveals a beat on our second-half fiscal 2024 sales and profit expectations. Earlier in the year, the company announced like-for-like sales in the first seven weeks of the second half of fiscal 2024 were 1% below the previous corresponding period. Given the headwinds facing discretionary retail, including cost of living pressures and interest rate rises, we expected conditions would deteriorate further through the second half. But this proved too pessimistic. Accent’s second-half like-for-like sales improved by 4% on the PCP, a sharp turnaround from a soft start. Accordingly, we upgrade our fiscal 2024 group sales forecast by 4% to AUD 1.5 billion.

Price vs Fair Value

AX1 is trading at a 134% premium.
Price
A$2.22
Fair Value
A$6.70
Uncertainty
High
1-Star Price
A$5.81
5-Star Price
A$9.79
Economic Moat
Mkfyx
Capital Allocation
Hbkknskx

Bulls Say, Bears Say

Bulls

If Accent can keep acquiring new, exclusive distribution agreements, like the recent deal with Hoka, it could continue to rollout stores at a time when many retailers are shrinking their physical network.

Bears

Accent’s rapid expansion in recent years creates a risk of potential store closures.

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Trading Information

Previous Close Price
A$2.22
Day Range
A$2.192.25
52-Week Range
A$1.672.36
Bid/Ask
A$2.18 / A$2.19
Market Cap
A$1.25 Bil
Volume/Avg
658,086 / 1.2 Mil

Key Statistics

Price/Earnings (Normalized)
17.03
Price/Sales
0.90
Dividend Yield (Trailing)
6.31%
Dividend Yield (Forward)
7.66%
Total Yield
6.31%

Company Profile

Accent Group is a retailer and wholesaler of footwear and apparel. It is the exclusive distributor of range of global brands, including Skechers, Vans, and Doctor Martens in Australia and New Zealand. Accent operates both monobranded stores and multibrand banners, such as Platypus, Hype DC, and The Athlete’s Foot. With a network of more than 700 physical stores and 30 websites, Accent is the largest footwear retailer in Australia.
Sector
Consumer Cyclical
Industry
Apparel Retail
Stock Style Box
Small Value
Total Number of Employees
2,180

Competitors

Valuation

Metric
AX1
06110
SUL
Price/Earnings (Normalized)
17.039.3512.76
Price/Book Value
2.762.192.44
Price/Sales
0.900.740.86
Price/Cash Flow
5.455.374.69
Price/Earnings
AX1
06110
SUL

Financial Strength

Metric
AX1
06110
SUL
Quick Ratio
0.281.120.35
Current Ratio
1.143.161.17
Interest Coverage
4.9618.928.07
Quick Ratio
AX1
06110
SUL

Profitability

Metric
AX1
06110
SUL
Return on Assets (Normalized)
6.15%14.45%8.22%
Return on Equity (Normalized)
16.42%23.58%19.70%
Return on Invested Capital (Normalized)
8.86%17.29%12.32%
Return on Assets
AX1
06110
SUL
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