The Accent Group Ltd (ASX: AX1) share price has sprinted 10% higher after giving a HY23 update.
Accent is an ASX retailer share that sells a wide range of shoe brands in Australia.
HY23 update
The company revealed that trading has continued to be strong during November and December.
It said that total sales (including The Athlete’s Foot franchisees) for the 27 weeks to 1 January were $825 million, up 39%, and up 33% excluding the impact of week 27.
The business reported that EBIT (EBIT explained) for the first half of FY23 is expected in be in a range of $90 million to $92 million. I think that’s great news for the Accent share price.
Accent said that the estimated impact of week 27 was around $36 million in sales, and around $10 million in marginal EBIT contribution.
Management commentary
The CEO of Accent Group, Daniel Agostinelli, said:
Trading conditions in November and December continued to be very positive and were consistent across Accent Group’s retail and wholesale banners. Deliveries of fresh new product throughout H1 and in the lead up to Christmas helped to drive higher than expected sales. Despite the impact of currency and clearance of discontinued brands, we are pleased with the year on year improvement in gross margin. Overall inventory levels are clean and well positioned for the start of H2, reflecting a strong in-stock position in core lines and early deliveries of wholesale product for H2 sales.
Trading update
Management said that trading to date in January including the “back to school” has been “in line with expectations” including a continued recovery against softer trade last year.
The business is going to report its FY23 first half result on 23 February 2023 after ASX trading has closed.
Final thoughts on the Accent share price
I think that Accent is one of the more promising businesses on the ASX. I like its store rollout plan and there is the potential for international expansion for some of its owned brands.
In my opinion, the company’s earnings could be somewhat resilient during 2023 – I think people will continue to choose shoes.
I’m not sure if it’s a great idea to look at now, after such a strong run in the last few weeks and months. There are other ASX dividend shares I would rather buy. But if Accent were to fall, it’d be an interesting one.
