It has been a positive day of trade for the Accent Group Ltd (ASX: AX1) share price on Thursday.
In late morning trade the footwear retailer's shares are up 7.5% to $1.47 following the release of a strong first half result.
Here's a quick summary of how Accent performed in the first half in comparison to the prior corresponding period:
- Group sales from company owned stores up 11.2% to $389.4 million.
- Digital sales rocketed 94% higher.
- Gross margin improved by 280 basis points.
- Earnings before interest, tax, depreciation and amortisation (EBITDA) up 23.3% to $61.3 million.
- Net profit after tax increased 27.3% to $32.2 million.
- Earnings per share up 20% to 5.69 cents.
- Fully franked interim dividend lifted 50% to 4.5 cents per share.
- Outlook: Second half EBITDA growth of 10%.
Overall, I thought this was an impressive result and hard to fault. Especially given the weakening consumer sentiment which has impacted many retailers in recent months.
Accent Group's CEO, Daniel Agostinelli, appeared to be very pleased with the company's performance during the half.
He said: "The strength of our brands, stores and customer proposition along with the fully integrated omni-channel platform that has been built over the last 3 years, continues to deliver record financial results. With 12 exclusive distributed brands, 449 stores, 16 websites and more than 4 million loyalty base customers, Accent Group owns a powerful, scalable, end to end supply chain with direct access to brands and customers that ensures a strong competitive position for future growth."
He also revealed that another key driver of the strong half was the company's continued success with its strategy of "no lazy retailing". This strategy aims to remove discounting and focus on profitable sustainable sales. It resulted in like for like retail sales growth of 1.2% and a gross margin 280 basis points ahead of the same period last year.
Should you invest?
At 16x trailing earnings and providing a fully franked trailing 5.6% dividend yield, I think that Accent Group's shares are still great value even after today's strong share price gain.
This could make it a great option for investors along with fellow retailers Super Retail Group Ltd (ASX: SUL) and Wesfarmers Ltd (ASX: WES).
