The shares of one of the high quality dividend paying stocks, Accent Group continues to pursue a range of growth opportunities across its core banners and new businesses. Among the best growth stocks to buy now, its sales and profit reflect the strength of its business model.
Accent Group Limited (ASX: AX1)
Accent Group Limited has delivered strong sales and profit growth for the first half of FY25, despite operating in a challenging retail environment. AX1, one of the best long term dividend stocks, recorded total sales of $845 million, reflecting a 4.2% increase compared to the prior year, with owned sales rising by 4.6% to $767 million. Earnings Before Interest and Tax (EBIT) grew 11.5% to $80.7 million, while Net Profit After Tax (NPAT) increased by 11.7% to $47.2 million. Earnings per share (EPS) came in at 8.35 cents, and the Board declared a fully franked interim dividend of 5.5 cents per share, representing a 70% payout ratio.
During the half, the company achieved like-for-like (LFL) retail sales growth of 2.9%, despite gross margins declining to 55.6% due to a more promotional trading environment. The company effectively managed its Cost of Doing Business (CODB), reducing it slightly to 44.7%, with efficiencies gained in lease renewals, support team costs, and distribution expenses offsetting rising rents and wages.
Accent Group continued its aggressive store expansion strategy, opening 42 new stores during the half, bringing its total store network to 903 locations. Key store openings included Hype DC, The Athlete’s Foot (TAF), Hoka, Stylerunner, and Nude Lucy, all of which performed strongly. The company also secured exclusive distribution rights for Dickies and Lacoste, strengthening its wholesale portfolio, while also extending its agreements with Merrell and Timberland. At the same time, Accent divested The Trybe business and continued the phased closure of underperforming Glue stores.
In terms of financial outlook, the company reported that trading in the first seven weeks of H2 FY25 showed positive momentum, with LFL sales up 2.2%. However, gross margins remained under pressure, declining by 70 basis points year-on-year as consumers continued to seek value-driven purchases. Despite this, the company remains optimistic about growth opportunities, with plans to open more than 10 new stores in H2, further expanding its presence across high-growth retail categories.
Accent Group is also in advanced discussions with Frasers Group on a long-term strategic agreement, which is expected to be finalized in H2 FY25. The company continues to focus on driving profitable sales, managing costs efficiently, and executing its growth strategy in an evolving retail landscape.
Source: Company’s Report
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