Accent Group Ltd (ASX: AX1) shares are on the slide on Friday.
In morning trade, the ASX 300 stock is down 18% to 98.5 cents.
Why is this ASX 300 stock crashing?
Investors have been selling the company's shares following release of the footwear focused retailer's trading update.
According to the release, the HypeDC and Platypus owner revealed that sales were up 3.7% during the first 20 weeks of FY 2026. This includes wholesale sales and sales from new stores.
Things aren't quite as positive on a like for like basis, with retail sales down 0.4% on the prior corresponding period. Though, there are signs of improvement, with like for like sales growing 0.4% during October.
The ASX 300 stock also revealed that as of the end of October (Week 18), its year to date gross margin was 160 basis points (1.6%) below last year. Management notes that this is reflective of the elevated promotional environment.
Commenting on current trading conditions, management said:
Retail market conditions remain challenging, including ongoing promotional activity. The sports category continued to perform well, particularly running and performance footwear across The Athletes Foot and distributed brands HOKA, Saucony and Merrell. Lifestyle footwear sales have been soft and below expectations. Wholesale sales are ahead of prior year, with forward orders remaining strong into the second half of FY26.
Positively, cost of doing business (CODB) and its inventory continue to be well managed and are in line with expectations.
FY 2026 guidance
Given that like for like sales have been below expectations of low single-digit growth and its gross margin has been below last year's levels, the ASX 300 stock expects its first half earnings before interest and tax (EBIT) to be in the range of $55 million to $60 million. This is down sharply from $80.7 million in the first half of FY 2025.
Looking ahead, management is guiding to full year EBIT in the range of $85 million to $95 million. This will be down from $110.2 million in FY 2025.
Management also provided an update on its store network. It highlights that the Skechers and HOKA agreements are continuing and the first Sport Direct store has now opened. It said:
As previously announced, the Company has extended the Skechers distribution agreement to 2035 and recently extended the HOKA distribution agreement by 5 years to 2030. Due to the change of ownership of Dickies, a decision has been taken to discontinue this non-material distribution agreement.
The Company is pleased to report the successful opening of the first Sports Direct store at Fountain Gate, Victoria, on 15 November 2025, alongside the launch of the Sports Direct online store — a key milestone in the brand's rollout across Australia and New Zealand. A further 3 stores are planned for the remainder of FY26, with at least 50 stores targeted over the next 6 years.
