In trading update, Accent Group warns profits will drop

Footwear retailer Accent Group has reported strong delivery volume of new products is returning, however subdued sales volumes in May and June were below expectations.

The company owns and operates retail businesses such as Platypus, HypeDC, The Athlete’s Foot, Subtype, The Trybe, Pivot and 4 Workers, and distributes global brands including Skechers, Vans, Dr Martens and Merrell.

In a trading update, the company says it expects EBIT to be in the range of $61 to $63 million.

That figure takes into account $7.6 million of one-off, non-cash charges relating to a previously advised write-down of Pivot store fit-out costs of $5.1 million, and another $2.5 million spent on impairment charges relating to store lease assets in a small number of stores where sales traffic levels have still not recovered.

Pivot sells a branded range of apparel, footwear and accessories across sports, training and lifestyle categories. The footwear and lifestyle workwear concept opened last year in June in Sydney’s Shellharbour. It now operates 13 stores across Australia.

Group CEO, Daniel Agostinelli, said the group experienced a “positive customer response” in the first three weeks of the financial year.

“Like-for-like sales for this period have been positive albeit against restrictions and store closures in July last year, gross margin rate has also tracked well ahead of the prior year.”

Though the gross margin rate is ahead of the prior year, uncertainty in the retail industry has continued to impact sales in May and June.

The company says it expects the strong momentum to continue in Glue and Stylerunner brands, and the new stores opened across all its banners are also performing well.

The post In trading update, Accent Group warns profits will drop appeared first on Inside Retail.