AX1 - footware, Consumer Discretionary, Consumer Discretionary Distribution & Retail
Accent Group is an integrated consumer business in the retail and distribution sectors of branded performance and lifestyle footwear, apparel and accessories with over 890 stores across 18 different retail banners and distribution rights for 12 international brands across Australia and New Zealand.
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ROIC Vs WACC
For Accent Group Ltd (AX1 on ASX), current trailing return on invested capital (ROIC) is approximately 5.19% to 5.83%, while the weighted average cost of capital (WACC) sits around 6.18% to 8.06%. Year-by-year 10-year historical tracking shows ROIC tightly oscillating around or slightly below WACC during softer retail cycles, reflecting a narrow economic spread. [1, 2]
Current Capital Returns vs. Cost of Capital
- ROIC: ~5.19% (Trailing Twelve Months calculation)
- WACC: ~8.06% (Blended cost of equity and debt)
- Economic Spread: Negative in recent periods, implying recent returns trail the theoretical cost of funding. [1]
Key Observations
- Profitability Consistency: The business has maintained multi-year operational profitability across the decade, supported by store network scale across Accent Group Limited retail banners like The Athlete's Foot and Platypus. [1, 2]
- Value Creation Dynamics: In higher-margin historical fiscal years, AX1's ROIC pushed above its mid-single-digit WACC, whereas recent consumer cyclical pressures have compressed the return spread closer to parity or slight deficit.
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Debt to Equity
Accent Group Limited (ASX:AX1) has maintained a 10-year historical debt-to-equity (D/E) ratio ranging from a low of 0.16 to a high of 1.40, with a median of 1.11. Its current debt-to-equity ratio sits at approximately 1.31. [1]
Historical Range Overview
- Minimum Ratio: 0.16
- Maximum Ratio: 1.40
- Median Ratio: 1.11
- Current Ratio: 1.31 [1]
Financial Context
- Leverage Trend: The ratio reflects aggressive debt financing usage for business growth and lease liabilities over the past decade.
- Industry Comparison: AX1's leverage level places it higher than roughly 77% of peers in the cyclical retail sector. [1]
These are the D/E ratios for the last 5 years
2026 - 1.31
2025 - 1.13
2024 - 1.30
2023 - 1.26
2022 - 1.36
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