Accent Group Ltd (ASX: AX1) shares are catching the eye on Wednesday.
In afternoon trade, the ASX 300 stock is up 20% to 99.5 cents.
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Why is this ASX 300 stock rocketing?
Investors have been buying the footwear retailer's shares following the release of its half-year results.
For the six months ended 28 December, the footwear retailer reported a 2.4% increase in total sales to $865.2 million and EBITDA of $156 million. While the latter was down 1.5% on the prior corresponding period, it was comfortably ahead of Bell Potter's estimate of $141.3 million.
In addition, the Platypus and The Athlete's Foot owner's board declared a fully franked interim dividend of 3.25 cents per share. This was also better than Bell Potter's estimate of 3 cents per share.
Also potentially giving the ASX 300 stock a lift today was management's update on its Sports Direct rollout. It advised that it "successfully opened the first Sports Direct store and website with pleasing early trade."
Furthermore, management is in active negotiations on a further 9 store locations, supporting its long-term target of at least 50 stores over the next 6 years.
The ASX 300 stock wasn't just opening stores during the half. It also closed a number of loss-making businesses and stores, with further store closures planned in the second half. It notes that these actions not only improve profitability but also enable senior management to redirect focus and resources toward growth initiatives.
Management commentary
The ASX 300 stock's CEO, Daniel Agostinelli, said:
In a promotional trading environment, growth was achieved across many of our businesses. The Athlete's Foot, HOKA, Merrell and Nude Lucy all experienced strong growth, pleasingly Platypus and wholesale sales were ahead of prior year with wholesale forward orders also ahead of prior year into the second half of FY26. Cost of doing business (CODB) and inventory continue to be well managed.
Trading update
Accent Group has started the second half in a positive fashion. It advised that sales between 29 December and 22 February have grown by 7.1%. Continuing business gross margin in January was also in line with the prior year.
In light of this, the ASX 300 stock has confirmed its guidance for second-half EBIT in the range of $30 million to $35 million.
Agostinelli added:
I am pleased with the early trade from Sports Direct, the launch of Lacoste and the forward pipeline of Wholesale orders. Recent refinancing and facility extension reinforces the strength of the balance sheet and supports ongoing investment in growth. The team remains focused on driving profitable sales, tightly managing controllable costs and executing our key growth initiatives.
