The Accent Group Ltd (ASX: AX1) share price is on course to end the week with a strong gain.
At the time of writing, the footwear retailer's shares are smashing the All Ords index with an impressive 13% gain to $1.71.
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Why is the Accent share price racing higher?
Investors have been bidding the Accent share price higher on Friday after the company released a trading update ahead of its annual general meeting.
According to the release, business has been booming for Accent so far in FY 2023. For the first 18 weeks of the financial year, total group owned sales are up 52% compared to the prior corresponding period.
Pleasingly, the company's decision to focus on improving its gross margin has been a success, with Accent reporting a 570 basis points increase in its gross margin compared to the same period in FY 2022.
This bodes well for its first half earnings growth if it has managed to control its operating costs during the period.
Accent's CEO, Daniel Agostinelli, was pleased with the stronger than expected start to the year. He commented:
We are very pleased with trade to date which has been above expectations. Our continued focus on driving full price, full margin sales has resulted in strong margin recovery from last year. Our store opening program is on track and we expect to open around 50 new stores in H1.
And while Agostinelli couldn't provide any forward guidance, he appears very optimistic on the company's prospects in the all-important holiday trading period. He said:
Whilst we provide no forward guidance, inventory levels reflect strong deliveries of exciting new product across all banners, and the Group's in-stock position along with sales and operational plans are well set heading into the three most important trading months of the year.
