Accent (ASX: AX1) has given investors an update today, is it time to buy shares?
What is Accent?
Accent is a footwear retailer that was founded in 1981. It is best known in Australia for its network of The Athlete’s Foot stores. It now operates a variety of footwear & fashion chains including Platypus, Skechers, Hype, Vans, Timberland, Merrell and Dr Martens.
What was in the update?
Accent has given an update to say it has achieved a strong FY20 result.
May 2020 was a record month for its digital sales with a new daily record of over $2 million during ‘Click Frenzy’. This was achieved at the same time as all stores were open and trading. Digital sales of May were $29 million. In June, digital sales represent 23% of total sales.
Accent said that the digital infrastructure that the company has built over the last three years has ensued record customer numbers and deliveries and could be managed from the digital platform with significant additional capacity and scalability still available.
All Australian stores had re-opened by 11 May and all New Zealand stores had reopened on 22 May. The company received the jobkeeper program in Australia and the wage subsidy scheme in Australia, which helped open stores.
In general, sales in New Zealand, WA, SA and Queensland and regional areas have bounced back harder than Melbourne and Sydney.
The company has successfully negotiated with landlords and has kept paying rent. However, it will close stores if an agreement can’t be reached.
FY20 guidance
Like for like sales in May and June have grown by 7%. FY20 EBITDA is expected to grow by 10% compared to FY19. However, the company will recognise an impairment $3 million to $4 million due to COVID-19 impacts.
Accent shares are up 4% in early trade. I can see why, it’s going well – shoes are still popular even during a pandemic. I’d be happy to buy a few shares based on this news of growth today.
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Disclosure: At the time of writing, Jaz doesn’t own shares in any of the businesses mentioned.
