If you are on the hunt for a high-quality ASX dividend stock that offers value, yield, and growth potential, one name that deserves a spot on your watchlist — or in your portfolio — is Accent Group Ltd (ASX: AX1).
Despite delivering solid performance across its core banners and continuing to expand its national footprint, Accent Group shares have quietly dropped 33% from their 52-week high, falling from $2.66 to just $1.74.
But for income investors, this may be a golden opportunity to pick up a top-tier retailer at a sharp discount.
Why is it an ASX dividend stock to buy?
Accent Group owns and/or operates a stable of well-known footwear and apparel brands including Platypus, The Athlete's Foot, Hype DC, Skechers, Vans, Stylerunner, Nude Lucy, and now Hoka, which has rapidly gained traction with Australian consumers.
As Australia's market leader in footwear retailing, the ASX dividend stock continues to benefit from strong brand demand, exclusive distribution rights, and a highly developed omni-channel platform — with roughly 20% of retail sales now generated online.
It is also expanding vertically with its own brands and rolling out new store concepts. This could soon include the Sports Direct banner in partnership with UK-based Frasers Group, which now holds a 15% stake in the company. Negotiations for a rollout are expected to conclude in the second half of FY 2025.
Solid performance in FY 2025
Accent's half-year results for FY 2025 came in as expected back in February, with revenue up 4% year-on-year and strong performances from banners like The Athlete's Foot, Hype DC, and Stylerunner. Like-for-like sales in the critical back-to-school period rose by 2.2%, with management calling it a record result.
Importantly, inventory and store expansion were flagged as key areas of investment, with 42 new stores opened in the first half alone — beating expectations. The group is targeting at least 10 more in the second half, pushing its total store count past 900.
Margins have been under modest pressure — down 70bps year-on-year — but remain healthy, particularly in vertical brands which are helping offset promotional activity.
Dividends
Accent Group isn't just a retailer with growth potential — it is also a reliable ASX dividend stock. And according to Bell Potter, those dividends are expected to grow meaningfully in the years ahead.
The broker is forecasting fully franked dividends per share of 10.2 cents in FY 2025, 12.7 cents in FY 2026, and then 14.3 cents in FY 2027.
Based on its current share price of $1.74, this equates to dividend yields of 5.9%, 7.3%, and 8.2%, respectively.
Bell Potter has a buy rating on the ASX dividend stock with a $2.60 price target. This means that as well as big dividend yields, there is potential upside of almost 50% for investors over the next 12 months. The broker said:
We continue to view growth catalysts ahead for AX1 as Australia's market leader in footwear retailing, in core/new brands & regions, vertical brand strategy (~8% on owned sales) in addition to the sizable store roll-out opportunity of the global Sports Direct banner in Australia (as per prev. research) with the strategic investment by FRAS in AX1 (~15%) and conclusion of negotiations expected in 2H.
