Why the Accent Group Ltd (ASX:AX1) share price rocketed 17% higher today

In morning trade the Accent Group Ltd (ASX: AX1) share price has rocketed higher following the release of its annual general meeting presentation.

At the time of writing the footwear retailer’s shares are up over 17% to $1.30.

What was in the update?

As well as providing the market with a reminder on its strong performance in FY 2018, today’s presentation included that all-important trading update.

When the company released its results in August, management advised that it was targeting mid-single digit EBITDA growth in FY 2019.

It expected to achieve this through low single digit like for like sales growth, continued strong growth in digital, and growth from new stores.

As well as this, continued margin improvement through increasing vertical brands penetration, new emerging brands, and reduced discounting were expected to support its EBITDA growth.

Pleasingly, the first 20 weeks of FY 2019 have been “materially stronger” than expected.

This has been driven by like for likes sales growth of 2.5%, digital sales growth of 80%, increased new store openings, better than expected performances from new stores, a 300 basis point increase in gross margin, and the buyback of The Athlete’s Foot stores being ahead of schedule.

Management has reminded investors that the Christmas and back to school periods are vitally important for the retailer. But if trading continues in line with what it has experienced thus far, first half EBITDA is expected to be between 15% and 20% higher than the prior corresponding period.

The outlook for the second half period remains the same, with management targeting mid-single digit EBITDA growth.

Should you invest?

I thought that this update was incredibly positive and I can’t say I’m surprised to see its shares rocket higher today. Especially considering how they have inexplicably fallen significantly since the end of August.

Despite today’s gains, I still see a lot of value in Accent Group’s shares and think they would be worth considering along with fellow beaten down retail shares Adairs Ltd (ASX: ADH) and Super Retail Group Ltd (ASX: SUL).

All those shares provided decent dividends, just like these buy-rated dividend shares which have been tipped as potential market beaters in 2019.

JUST RELEASED: Our Top 3 Dividend Bets for 2019

NEW! The Motley Fool’s team of crack analysts has just released a timely report revealing the names and codes of their top 3 dividend share recommendations for 2019. Be among the first investors to get access—FREE, for a strictly limited time. You’ll discover the names of 3 hefty dividend paying companies with what our analysts consider to be solid growth prospects for the year ahead…

The first two offer fat, fully franked yields and the third is a surprising REIT offering you the chance to become a landlord with none of the hassle! If you’re looking for hot new ideas, look no further. But you do need to hurry. Snap up your free copy now, before supplies run out!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our top 3 dividend share recommendations right away.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Super Retail Group Limited. The Motley Fool Australia has recommended Accent Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!