Accent (ASX:AX1) share price on watch after strong trading update

The Accent Group Ltd (ASX:AX1) share price could be on the move today after releasing a trading update ahead of its annual general meeting…

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The Accent Group Ltd (ASX: AX1) share price could be on the move today after the release of a trading update ahead of its annual general meeting.

How is Accent performing in FY 2021?

This morning the footwear retailer revealed that its sales for the first 20 weeks of FY 2021 are well ahead of its expectations.

According to the release, Accent's like for like sales are up 15.7% over the period excluding its Auckland and Victorian stores.

In respect to its Auckland and Victorian stores, the company estimates that their closures have impacted its sales by $39 million compared to the prior corresponding period. Based on this, total like for like sales were up 1.3% over the 20 weeks.

Accent's Digital business has continued its strong performance thanks to the shift to online shopping. It recorded a 129% increase in sales compared to the same period last year.

Accent Group CEO, Daniel Agostinelli, said: "With Victorian stores now open post lockdown, trade is strong and well ahead of expectations. We are continuing to see digital sales growth in excess of 100% and customers flooding back to Victorian physical stores since reopening at the end of October."

"The strength in trade in the other states and New Zealand as previously reported has continued. We do not expect that the recent lockdown in Adelaide will have a material impact on sales given our store footprint and demonstrated capability to pivot to online sales," he added.

New stores.

Also growing is the company's store network. Despite the pandemic, Accent is on track to open approximately 80 new stores in FY 2021. This includes new concepts, such as Stylerunner.

At the end of October, the first Australian Stylerunner store opened in Armadale, Victoria. Pleasingly, management advised that sales to-date are materially ahead of expectations. An additional three stores have been signed.

In addition to this, three Pivot stores are now open in Highpoint and Ballarat in Victoria and Shellharbour in New South Wales. All three stores are trading well against expectations. A total of 15 stores are planned to be opened by the end of FY 2021.

Mr Agostinelli commented: "We are pleased with the strong trade to date and delighted with the performance of our new stores in Stylerunner and Pivot. Our plans are well set to capitalise on the important November cyber events, Christmas and Back to School trading periods."

"Our integrated omnichannel model has allowed us to trade strongly through a highly disrupted period along with demonstrated operating capability to respond to store impacts that may arise due to COVID-19, including the current Adelaide lockdown," he concluded.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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.

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