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Accent Group (ASX:AX1) share price on watch after bumper FY21 result

Despite enduring 14 separate lockdowns, footwear retailer Accent Group Ltd (ASX: AX1) has announced its fourth consecutive year of record profits.

With the company releasing its FY21 report overnight, Accent’s share price will be one to watch today.

The business has been a major beneficiary of pandemic induced border closures, as travel budgets were reallocated to discretionary retail.

2-year Accent Group share price chart

Rask Media AX1 2-year share price
Source: Rask Media AX1 2-year share price

Big strides in sales and profits

Key operating metrics for the year ended June 30 2021 include:

  • Group sales increasing 19.9% to $1.14 billion
  • Earnings before interest and tax (EBIT) up 32.1% to $124.9 million
  • Net profit after tax (NPAT) improving 38.6% to $76.9 million
  • Earnings per share (EPS) growing 38.2% to 14.21 cents
  • Full-year dividend of 11.25 cents fully franked, up 21.6%
  • 90 new store openings, taking the total store network to 638
  • 8.4 million loyalty members, an increase of 1.6 million
Accent brand stable. Source: AX1 FY21 presentation

Key brands contributing to sales included Hype DC, Skechers, Platypus, The Athletes Foot and Trybe.

Moreover, online sales were a key driver of sales growth in FY21, increasing 48.5% to $209.9 million. This represents 20.9% of total group sales.

Accent launched four new websites during the year, bringing its total to 31. As a result, the company now has multiple avenues it can win from online shoe shopping.

Store rollouts to spur future growth

The company is planning to capitalise on a strong FY21 by opening at least 65 new stores across its range of labels.

The will enable Accent to reach its FY22 goal of 700 stores.

Notably, 20 new StyleRunner stores are expected to be trading by early 2022, up from just four at the end of FY21. Accent plans to grow its Stylerunner store network to 60 within the next three years.

Similarly, the company plans to grow the store count of its recent acquisition, Glue, to 60 stores by 2023. Currently, Glue has 22 stores, well below listed competitor Universal Store Holdings Ltd (ASX: UNI) which has 67.

My take

Similar to Super Retail Group Ltd (ASX: SUL), Accent has been a major beneficiary of pent up savings due to restrictions on international travel.

The business currently trades on a grossed-up dividend yield of 6.8%. With more store openings ahead, I think the business looks attractive at today’s price.

Relative Super Retail, I think Accent will incur a smaller decrease in sales when borders reopen.

People will purchase shoes for gatherings and events that have been unable to go ahead due to capacity restrictions.

To keep up to date on all the latest news regarding Accent Group, Super Retail and the ASX, be sure to bookmark the Rask Media home page. And to stay up to date with the flurry of reports this month, bookmark our ASX reporting season calendar.

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At the time of publishing, Lachlan does not have a financial or commercial interest in any of the companies or funds mentioned.

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