The Accent Group Ltd (ASX: AX1) share price will be on watch on Friday following the release of the retailer's results late on Thursday afternoon.
How did Accent perform in FY 2019?
For the 12 months ended June 30, Accent posted total sales of $935.3 million and company owned sales of $772.5 million. This was an 8.7% and 14.3% increase, respectively, on the prior corresponding period.
One of the drivers of this gain was the company's strong Digital sales growth over the period. Digital sales grew 93% on the prior corresponding period, which means they now account for around 15% of sales.
Earnings before interest, tax, depreciation and amortisation (EBITDA) increased at the quicker rate of 22.5% to $108.9 million and its statutory net profit after tax rose 22.2% to a record of $53.9 million.
This was driven by gross margin improvement thanks to the ongoing removal of category and core discounting, increased penetration of its vertical distributed brands, new vertical product in shoe care, socks and accessories, and margin improvements in the acquired The Athlete's Foot stores.
Earnings per share came in 21.7% higher year on year to 10.02 cents. This latest increase means the company has now achieved a 10-year earnings per share compound annual growth rate of 14.5%.
In light of its positive performance, Accent has announced a fully franked final ordinary dividend of 3.75 cents per share. This brought its full year dividend to 8.25 cents per share, which was an increase of 22.2% on last year's payout.
Accent Group CEO, Daniel Agostinelli, said: "FY19 has been another record year of profit for Accent Group. The company continues to deliver against its growth plan objectives in gross margin improvement, new store rollouts, The Athlete's Foot (TAF) franchise acquisitions and innovation both in the digital and instore customer experience."
Outlook.
In FY 2020 the company intends to open 40 new stores in the local market (excluding store closures) across its Hype, Platypus, Skechers, Dr Martens, Cat, Merrell, TAF and Vans brands. After which, it sees an opportunity to add a further 30-40 stores by FY 2022.
Management advised that there are still no international opportunities that meet its minimum investment criteria, but it continues to review its options.
It also provided a trading update which revealed that like for like retail sales for the first 7 weeks of FY 2020 are up 2.7%.
Looking ahead, the company "is targeting profit growth in FY20, expected to be achieved through low single digit LFL growth, continued strong digital growth, 40 new stores, 54 stores annualising from FY19 and 65 current and new TAF corporate stores. Both gross profit margin % and cost of doing 6 business % are expected to be in line with the prior year."
