The S&P/ASX 300 Index (ASX: XKO) share Accent Group Ltd (ASX: AX1) has had a very strong start to 2023, with the Accent share price up by over 30%.

This ASX retail share is a growing shoe retailer with a number of brands – some it owns and others it distributes, including The Athlete’s Foot, CAT, Hoka, Kappa, Skechers, Vans, Henleys, Dr Martens and Glue Store.

The company recently reported its FY22 half-year result, which included several impressive numbers.

Earnings recap

It said that in the first six months of the year, total sales went up 39% to $825 million, earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 70.9% to $170.2 million, earnings before interest and tax (EBIT) soared 201% to $91.2 million and earnings per share (EPS) improved by 292% to 10.7 cents per share.

As investors can see, profit margins improved. The gross profit margin improved 190 basis points while the cost of doing business (CODB) ratio improved 470 basis points.

Interestingly, Accent decided to pay an interim dividend of 12 cents per share.

During the half, it opened 53 new stores and closed 10 stores where required rent outcomes “could not be achieved.”

Nude Lucy is a lifestyle apparel brand that was acquired as part of the Glue Store acquisition. The ASX 300 share said that 15 Nude Lucy concept stores have seen “strong early results.”

Growth outlook

The ASX 300 share can’t control the Accent share price, but it can implement growth initiatives. It’s planning to open at least 20 new stores in the second half, with potential growth for both its core banners and new businesses.

The business is expecting profit growth from Glue Store and Stylerunner with “continued operational improvement and as the vertical programs in these businesses grow.”

It’s expanding expecting profit growth from The Athlete’s Foot thanks to margin expansion, with franchise stores “continuing to be acquired”. It now has 91 corporate stores and 65 franchise stores.

In terms of a trading update, like-for-like sales for the first seven weeks of the second half of FY23 were up 16%. The company said that it hasn’t seen any significant change in consumer spending in its categories. The Accent boss suggested that many of its brands target younger customers, who tend to be “less impacted by interest rates and cost of living pressures.”

Can the Accent share price keep going?

There’s nothing to say that it can’t. I was suggesting last year that Accent had been oversold. It’s up almost 50% since then.

I don’t think it’s as clear of a buy now as it was then – but it’s still down 17% from the November 2021 price.

There are plenty of signs to say that the ASX 300 share could be resilient in the short term and perform in the long term, with its quality portfolio of brands and growing store network.

I’d still call it a buy, but I do think a lot of the investor sentiment recovery has now occurred, so there might be a better time to buy it later this year.

The post Up 30% in 2023, can this ASX 300 share keep rocketing higher? appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 300 shares soaring to new 52-week highs on Friday
• Why Accent, Brambles, Infomedia, and Pilbara Minerals shares are pushing higher
• Accent share price races 10% higher after half-year profits triple
• 6% dividend yield! An ASX share to buy in February and hold for 10 years
• These are the growing ASX dividend shares to buy now: analysts

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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