AX1.AX Stock Today: Glue Store Exit, H1 Profit -40% – February 26
Accent Group stock is in focus today after management moved to exit Glue Store and posted mixed first‑half numbers. Accent Group (AX1.AX) reported revenue up 5% to A$816.9m, but after‑tax profit fell 40% to A$28.1m on higher costs. Glue Store booked an A$8.4m H1 loss, prompting plans to shut or sell all 16 stores by fiscal year‑end. Early H2 sales are up 7%, and the group is leaning harder into Sports Direct, Lacoste, and HOKA. We outline what this means for investors, including likely restructuring charges and trading levels.
H1 scorecard: revenue up, profit hit
Revenue grew 5% to A$816.9m as the core banners held share, but after‑tax profit fell 40% to A$28.1m. Glue Store recorded an A$8.4m loss, a clear drag on group earnings. Management flagged early‑H2 sales up 7%, offering a better start to the second half. We think the mix shift to global brands is central to restoring earnings momentum through FY26.
Higher wages, occupancy, and logistics weighed on profit. Even so, the trailing gross margin sits near 38%, and SG&A is about 23.5% of sales, showing some discipline. Operating margin pressure should ease if loss‑making stores close on time. Watch inventory discipline, with days on hand around 123, to support cash conversion in H2.
Glue Store closure: timeline and P&L impact
Accent Group will shut or sell all 16 Glue Stores by fiscal year‑end after the chain’s A$8.4m first‑half loss, according to local reports: Popular fashion retailer to shut and Glue Store to close in shake-up by retail giant. Execution speed matters. Faster exits reduce ongoing losses and free management focus for higher‑return banners.
Expect one‑off restructuring charges in H2 tied to leases, redundancies, and inventory write‑downs. These could weigh on statutory profit but should remove a structural drag into FY27. We will watch disclosure on provisions, cash exit costs, and any working‑capital release from stock clearance. Clean execution could lift sentiment on Accent Group stock.
Lacoste and HOKA expansion: mix shift to global brands
Strategy now leans into global names and formats: Sports Direct, Lacoste, and HOKA. Accent Group holds exclusive rights for many marquee brands in ANZ, a clear competitive edge. Early‑H2 sales up 7% suggest this pivot is gaining traction. Maintaining allocations, product depth, and marketing support will be key to comp growth through winter.
Brand growth is not risk‑free. Wholesale allocations can tighten, and demand may soften if consumers pull back. Capex discipline remains solid, with capex about 2.1% of revenue on a trailing basis. Inventory days of roughly 123 highlight the need for tight buying and faster turns as the mix tilts to performance footwear and premium apparel.
Accent Group stock today: valuation, levels, and signals
At A$0.83, the shares trade on a P/E near 9.95, EV/EBITDA around 3.8, price‑to‑sales ~0.41, and price‑to‑book ~1.24. The dividend yield is about 7.0%, but the payout ratio near 98% looks stretched until earnings recover. Leverage is moderate (D/E ~1.13) and liquidity reasonable (current ratio ~1.09). Price sits near 52‑week lows, demanding careful risk control.
Momentum is improving but not decisive. RSI is 63 and ADX ~14.7 signals a weak trend. Bollinger Bands sit near A$0.84–A$0.97, with the mid‑band around A$0.91. We watch A$0.84 as support, A$0.91 and A$0.97 as resistance. Volume of ~3.53m vs 2.49m average and soft OBV caution patience. Our system grades: Company Rating A‑ (Buy) and Stock Grade B (Hold).
Final Thoughts
Accent Group has taken a hard decision on Glue Store, which should improve quality of earnings once one‑offs roll through. H1 profit was down 40% to A$28.1m, but revenue rose 5% to A$816.9m and early‑H2 sales are up 7%, hinting at better trading. We think investors should focus on three items: the size and timing of restructuring charges, gross margin trends as premium brands scale, and inventory turns heading into winter. For Accent Group stock, near‑term levels sit around A$0.84 support and A$0.91–A$0.97 resistance. Income seekers should weigh the ~7% yield against a high payout until earnings normalise. This is information only; consider your objectives and seek personal advice before acting.
FAQs
Why did Accent Group’s H1 profit fall 40%?
Profit fell to A$28.1m as operating costs rose and Glue Store lost A$8.4m in the half. Wage inflation, occupancy, and logistics weighed on margins. While revenue increased 5% to A$816.9m, the mix and cost pressure offset growth. Management is exiting Glue to remove a structural drag.
How will the Glue Store closure affect results?
In the short term, expect one‑off restructuring charges for lease exits, redundancies, and inventory write‑downs, which can weigh on statutory profit. Over time, removing loss‑making stores should lift run‑rate margins and simplify operations. We’ll watch cash exit costs and any working‑capital release from stock clearance in H2.
Is the dividend sustainable at current levels?
The trailing yield is about 7%, but the payout ratio near 98% is high. Sustainability hinges on H2 trading, restructuring costs, and cash generation. If sales growth and margins improve, pressure eases. Until then, investors should expect a cautious stance on distributions and monitor cash flows closely.
What near‑term catalysts could move Accent Group stock?
Key drivers are the size and timing of restructuring charges, early‑H2 sales momentum (+7% reported), gross margin mix as Lacoste and HOKA scale, and winter footwear demand. Clear closure progress and steady comps could support a re‑rating, while slower execution or weak margins may cap the shares.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.