Accent Group (ASX:AX1) Valuation Explored After Trading Update Signals Softer Sales and Lower FY26 Earnings Forecast

Accent Group (ASX:AX1) shares dropped after the retailer announced a trading update that highlighted weaker like-for-like sales and gross margin pressure from heightened promotional activity. Earnings are now expected to fall in FY 2026.

See our latest analysis for Accent Group.

This latest trading update comes on top of a rough year for Accent Group shareholders, with the share price down 57.4% year-to-date and 53.1% lower over the past twelve months on a total shareholder return basis. Recent events such as management changes, a rare shareholder rebuke on executive pay, and cautious earnings guidance have amplified market uncertainty, and price momentum has clearly faded for now.

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With shares trading at a steep discount to analyst targets but forward earnings set to fall, investors now face a crucial question: is this pain already in the price, or could there be value if Accent Group recovers?

Most Popular Narrative: 40% Undervalued

Accent Group’s most-watched valuation narrative places fair value far above the recent close, hinting at sharp upside if core assumptions hold true. That gap has become a talking point as investors weigh ambitious expansion against near-term setbacks.

Significant pipeline of new store openings (at least 30 in FY26, plus major Sports Direct rollout and expansion of banners like Stylerunner and Hoka) allows Accent Group to further leverage urbanization and a youthful, fashion-driven demographic, supporting steady revenue growth and store productivity.

Read the complete narrative.

What if this valuation is built on a bold bet? The biggest secret in the forecast is not just earnings, but the scale and pace of future growth built into those assumptions. Want to know why? The full narrative reveals the numbers that could make or break this potential upside.

Result: Fair Value of $1.69 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent margin pressure and slowing like-for-like sales could undermine expansion plans. These factors may also challenge the case for significant upside in Accent Group shares.

Find out about the key risks to this Accent Group narrative.

Build Your Own Accent Group Narrative

Curious to see where you’d land if you explored the facts for yourself? Creating your own analysis takes just a few minutes and might reveal a whole new perspective, so why not Do it your way

A great starting point for your Accent Group research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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