Accent Group has significantly downgraded its earnings outlook for the second half of FY26, citing unexpected macroeconomic deterioration in April as conditions shifted sharply from guidance issued earlier in the year. The company now expects H2 FY26 EBIT to fall within a range of $23 million to $28 million, a material reduction from previous expectations. For the full year FY26, the company guides to EBIT between $79.5 million and $84.5 million, reflecting the weaker trading environment expected to persist through June.
The revised guidance comes despite solid growth in total owned sales for the first 18 weeks of H2 FY26, which increased 7.1% compared with the prior year period. However, like-for-like retail sales declined 1% over the same timeframe, signaling that underlying store performance has weakened. Gross margin for the continuing business fell to 54.2%, down 80 basis points from the prior corresponding period, indicating both volume and pricing pressure in the retail environment.
Company management attributes the downturn to geopolitical tensions that escalated in late March, which contributed to higher fuel costs and significantly dampened consumer confidence. Trading remained on track through March in line with prior guidance, but conditions deteriorated sharply during April. The company has incorporated approximately $2 million in restructuring costs into its guidance for the April to June period as it implements a new cost-out program designed to offset some of these headwinds.
Accent Group is hosting an Investor Strategy Day on 13 May 2026, where the company will detail the cost-out program and outline its medium-term financial framework. This event provides an opportunity for the market to assess management’s response to the current trading environment and the company’s path to earnings recovery.
Beyond the immediate trading challenge, Accent Group disclosed that the Australian Securities and Investments Commission is conducting an investigation into potential contraventions of the Corporations Act related to trading activity between 23 May 2025 and 10 June 2025. No charges have been laid against the company or any individuals, and the company has committed to full cooperation with ASIC. The investigation appears to be in its information-gathering phase, though preservation notices have been issued to the CEO and other senior employees. While these investigations are typically resolved over extended periods, the regulatory distraction adds another layer of complexity during a challenging trading period.
Investors should monitor the Strategy Day presentation for specifics on the cost-out program and management’s outlook on consumer recovery. The company’s near-term earnings trajectory will depend significantly on whether macroeconomic conditions stabilize in the coming months, as further deterioration could result in additional guidance adjustments. This announcement is price sensitive and has been flagged as material by the ASX.
View the full ASX announcement (PDF)
About Accent Group Limited (ASX: AX1)
Accent Group Limited is a retail and distribution company that operates lifestyle footwear, apparel, and accessories stores across Australia and New Zealand. The company manages approximately 903 stores operating under 18 different retail banners and holds distribution rights for 12 international brands including Skechers, Vans, Timberland, UGG, and Dr. Martens. It serves as a major retailer and distributor of branded footwear and fashion products in the Asia-Pacific region.
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