Accent Group Faces Margin Pressure as Lifestyle Footwear Market Growth Stalls
Accent Group reports a modest decline in like-for-like sales and margin compression in the second half of FY25, setting full-year EBIT guidance between $108 million and $111 million.
- Like-for-like sales down 1.0% for 23 weeks to June 8
- Gross margin contracted by approximately 80 basis points in H2
- Challenging market conditions with low lifestyle footwear growth
- Full-year EBIT guidance revised to $108-111 million
- Investor briefing scheduled for August 22, 2025
Challenging Market Environment
Accent Group Limited, a leading player in the Australian lifestyle footwear sector, has provided a trading update for the second half of its 2025 financial year, revealing ongoing headwinds in a subdued market. The company highlighted that growth in the lifestyle footwear market has remained low from March through early June, impacting both retail and wholesale sales channels.
Sales and Margin Pressure
The update disclosed a 1.0% decline in like-for-like sales over the 23 weeks ending June 8, with the second half specifically seeing a sharper 2.5% drop. This sales softness has been compounded by a promotional environment that remains aggressive, forcing Accent Group to carefully manage inventory levels amid weaker demand. These factors have contributed to an 80 basis point reduction in gross margin compared to the prior year period.
Earnings Outlook and Investor Engagement
Despite these challenges, Accent Group has maintained a full-year earnings before interest and tax (EBIT) guidance range of $108 million to $111 million, reflecting cautious optimism about navigating the current market pressures. The company plans to release its full-year results on August 22, 2025, accompanied by an investor briefing call, which will provide further clarity on performance and strategic responses.
Looking Ahead
Accent Group’s update underscores the persistent difficulties in the lifestyle footwear sector, where consumer spending patterns and competitive promotional tactics continue to test profitability. Investors will be watching closely for how the company balances inventory discipline with growth initiatives in a market that shows little sign of rapid recovery.
Bottom Line?
Accent Group’s FY25 update signals cautious navigation through a tough footwear market, with eyes on August’s full-year results for clearer direction.
Questions in the middle?
- How will Accent Group adjust its promotional strategy to protect margins going forward?
- What impact will inventory management have on sales recovery in the second half of FY26?
- Can the company leverage new product launches or channels to offset market softness?
