Shares in footwear retailer Accent Group have slumped after the company slashed profit guidance by 23%, citing weak retail conditions and heavy discounting.
The company now expects full-year earnings of $85–95 million, a sharp downgrade from earlier guidance for high single-digit growth on last year’s $110.2 million. First-half earnings are forecast at $55–60 million, well short of analyst expectations of $79.6 million, implying a 28% cut. Like-for-like sales fell 0.4% over the first 20 weeks, while gross margins compressed by 160 basis points amid what Accent described as an “elevated promotional environment”.
Citi analyst Sam Teeger described the update as “a grim AGM update” and flagged “material EPS revisions likely in excess of 20%”.
He noted that while there are “some evidence of greenshoots with October LFL sales (growth) improving to 0.4 per cent”, investors are unlikely to give this much credence “given the magnitude of the earnings downgrades combined with November/December being more material trading months”. RBC analyst We-Weng Chen added that the softer earnings outlook raises questions over funding for the Sports Direct rollout, with 30 stores still planned by December 2029.
At midday shares were down 10.42% to $1.075.