20-Nov-2020:  Trading Update   plus   2020 AGM Presentation   and   Chairman and CEO Address to Shareholders

AX1 is up almost 5% so far today on the back of this positive update.

25-June-2020:  Business and trading update

AX1 is up by around 10% at 2pm - on a day when the market is down by a fair whack - ~2%.  Excellent Management at Accent Group!

27-Apr-2020:  Business Update

DIGITAL SALES SURGE AND ALL STORES REOPENING WITH NEW SAFETY PROTOCOLS

On 25 March 2020, Accent Group Limited (AX1) announced the closure of Company owned stores in Australia (Group Stores) from 5pm on 27 March 2020 for a period of 4 weeks.  Today, we are pleased to provide a further business update, including the significant acceleration we have seen in digital sales, and to announce our plans to progressively re-open our stores in compliance with Government directives and with the safety of our team and our customers our priority.
 
Digital sales surge

Continuing its 5 year investment and further energised focus on digital, Accent Group has seen a surge in the Company’s digital sales.  Digital sales have grown from an average of approximately $250,000 per day prior to our stores closing in March, to between $800,000 and $1.1 million per day for the last 2 weeks of April.
 
Whilst our stores were closed to the public during April, some Group Stores were opened and staffed to operate as ‘dark stores’ [stores closed for trade to the public and used as fulfillment points for digital click-and-dispatch to customers] using our endless aisle technology to access our entire inventory base and to enable click-and-dispatch of product to our customers.  Our digital business has also responded to this shift in consumer behaviour with targeted consumer content and offers to drive traffic and conversion.  As our digital sales continued to escalate, the number of Group Stores opened as dark stores increased progressively through April.  All of our Group Stores and a number of our NZ company owned stores are now staffed and operating as dark stores, working together with our distribution centres to fulfil our digital sales.
 
During this period, we have also developed and implemented new in-store protocols to help ensure a safe working environment for our team members working in our dark stores.
 
Accent Group CEO, Daniel Agostinelli said “After years of investment by Accent Group in our digital team and technology, I am delighted with the growth in our digital sales. It is clear that there has been a seismic and most likely enduring shift in consumer behaviour away from traditional shopping centres to shopping online. With 18 websites and our leading digital capability, Accent Group is capitalising on this trend. We will continue to drive digital growth as the number one priority in our company.”

Re-opening stores and new safety protocols

In Australia, shopping centres have been required to implement the Government’s measures to manage the COVID-19 virus (such as social distancing and public gathering measures) but have remained open.  Whilst many stores in shopping centres have temporarily shut during the COVID-19 pandemic period, a number of retailers have also continued trading in the centres where the Company’s stores are located.
 
During this time, we have seen an increased demand for footwear for essential workers, such as the Skechers range for health professionals. We are also seeing strong demand for active footwear and apparel as more people are taking part in physical activities, with strong trading in these categories, particularly on The Athlete’s Foot and Stylerunner websites.
 
Accordingly, we have made the decision to progressively re-open all Group Stores with our new safety protocols in place to comply with all Government directives and to prioritise the health and safety of our team members and our customers.  We will review and adapt these in-store measures as the environment evolves.
 
The initial protocols will include:

• Protective items such as hand sanitiser stations, face masks, gloves, disposable try on socks and disinfectant spray
• Social distancing measures of 1.5 metres between customers and team members, including at counters and seating areas
• Contactless serving of customers and payments
• Customer capacity limits in stores
• Training for team members on social distancing and additional hygiene measures

These protocols have been trialled successfully in several stores over the last 2 weeks and we will now be progressively re-opening all Group Stores to the public by May 11.
 
We believe that the significant increase in our online business most likely marks a permanent shift in consumer habits in Australia and NZ and we expect our online sales to represent a much larger share of our total sales in the future.  Our store network, along with our surging online business, is a fundamental competitive advantage to the Company, however we will not operate stores on unsustainable or uneconomic rental deals.  Accordingly, in the coming months, we will be re-evaluating the location, size and format of our store network to ensure the appropriate balance between digital and store sales.

--- click on link above for full announcement - including:

• Leases and landlord negotiations
• Supplier negotiations
• Wage subsidies
• Banking facilities

--- AX1 closed at $1.045 today, up +16%, but were up +36% earlier (at $1.28).

26-Mar-2020:  COVID-19 Update

Accent Group (AX1) will now close all stores in the Group from 5pm on Friday 27 March 2020 (tomorrow) for a period of 4 weeks.  This also means that all of the Company’s retail employees and the majority of support office employees will be stood down without pay for that period.  The Group will continue to trade through its 18 websites and wholesale business. 
 
During the stand down period, employees will continue to accrue entitlements and may access their annual and long service leave entitlements. 
 
Accent Group CEO Daniel Agostinelli said “It is with a heavy heart that we have made this decision, but we believe this to be in the best interests of the health and wellbeing of our team members. The Company intends to do everything possible to return the business to normal operations when environmental conditions normalise whilst always prioritising the safety and wellbeing of our team”. 

[click on link above for more]

What I'm noticing more recently is the market's various reactions to these updates, and to guidance withdrawals, to the cancellation or deferral of dividend payments, etc.  Increasingly, the share prices of these companies actually rise on these announcements (as the AX1 SP has done so far today - up +2%).  Not all companies, but a good number. 

What that suggests is that the downside was already priced in, and so it's a case of "sell on the rumour, buy on the fact".  It's the inverse of what happens when good news is expected, an example being that when a massive stimulus package is expected to be announced in the US, the DOW might rally 10%, and then do next to nothing or fall when the actual package is announced (because the upside had already been priced in, and then some).  That's "buy on the rumour, sell on the fact". 

But my point is that it is increasingly looking like the downside is already priced in for a number of ASX-listed companies, as evidenced by them not falling any further when they announce negative news that would usually cause their share price to fall further.

20-Feb-2020:  Accent Group (AX1), a company I've made money with before - but haven't been following lately (or invested in for over a year), reported their first half results yesterday (AFTER the market closed):

19-Feb-2020:  FY20 Half Year Results Announcement

FY20 Half Year Accounts

FY20 Half Year Results Presentation

AX1 is covered by Citi, Morgans, and Morgan Stanley, and they are all bullish.  Citi have a "Buy" call with a $1.95 TP (AX1 shot through that today!).  Morgans have an "Add" call with a $2.15 TP.  Morgan Stanley have an "Overweight" call on AX1 and a TP (target price) of $2.30.  Those are all current as of today's updates from each of them to their clients, post last night's results from AX1.  Morgans have upgraded AX1 from a "Hold" to "Add", but otherwise those target prices and calls remain unchanged from before the results were announced, i.e. all three brokers were already bullish (except Morgans who were neutral before and are now moderately bullish).  AX1 have risen +10% today (to $2.13) on the back of all that.

It wasn't a bad set of numbers:

PERFORMANCE HIGHLIGHTS

• Net Profit After Tax of $35.3m million, up 9.7% on the prior year
• Group sales (company owned stores) of $444.2 million, up 14.1% on the prior year
• EBITDA of $67.7 million, up 10.5% on the prior year
• EBIT of $52.6 million, up 11.1% on the prior year
• Earnings Per Share of 6.54 cents, up 9.2% on the prior year
• A fully franked interim dividend of 5.25 cents per share, up 16.7% on the prior year
• Strong cash on hand of $44.1 million 

The dividend increase would be especially welcome for income-focussed investors.  

Excerpt from last night's results announcement (link to full announcement at top of this straw):

Accent Group Limited (ASX: AX1) today reports H1 FY20 Net Profit After Tax up 9.7% to $35.3 million. EBITDA grew by 10.5% to $67.7 million. This result was achieved through strong sales growth from digital and new stores, profit growth in The Athletes Foot (TAF), underlying gross margin improvement and a focus on cost of doing business. Whilst the headline gross margin was below the prior year, this result was solid given the FX headwinds (H1 currency impact of 120bp) and more significantly the highly competitive market environment driven by the Cyber events in November. The gross margin impact to EBIT margin was largely offset by improvements in cost of doing business. 
 
Accent Group CEO, Daniel Agostinelli, said “We are pleased to have delivered strong sales and earnings growth in a challenging environment. The strength of the Group’s digitally integrated business model, along with the ongoing focus and investment on innovation in digital and store formats, continues to drive growth."

--- click on link above for more ---

I don't currently hold any AX1, but results like this make me wish I did.  CEO Daniel Agostinelli's good mate Brett Blundy (best known for his Lovisa stores, ASX:LOV) is now on the AX1 board and also owns 18% of the company (97.54 million AX1 shares) and was the main driver behind installing Agostinelli in the top job at AX1, and it seems to be going reasonably well now, after that little hiccup (sell-off) in the final three months of 2018 when the SP appeared to have gotten ahead of itself - at $1.60 to $1.65.  They're now back up to $2.13, with plenty of momentum.  I'm not sure of what they're actually worth (intrinsic value), but they're obviously worth as much as $2.13 to somebody!  Could be a decent momentum trade if they keep rising.