Thank you, Ronnie. Good morning everyone, and thank you for taking the time to attend the call today.

Joining me on the call is our Finance Director, Matthew Durbin. We will now take you through the results for the 52 weeks ended 28th of June 2026 and a trading update for the first seven weeks of FY 2027.

There will be an opportunity to ask questions at the end. FY 2026 was a was a challenging and excuse me, FY 2026 was a year of significant strategies strategic progress for the Accent Group.

We delivered against challenging macroeconomic backdrops. The consumer environment remained difficult throughout the year, and the fourth quarter in particular was materially impacted by the escalation of geopolitical tensions and a significant deterioration in consumer confidence.

Notwithstanding that backdrop, our performance brands continued to grow. The Athlete's Foot, HOKA, Merrell, and Saucony all grew, and we saw year-on-year growth for Skechers, Stylerunner, and UGG.

Nude Lucy delivered another record year of sales and profit. If I can now refer you to the operational highlights on page 5 of our investor presentation, which was released to the ASX this morning.

The key highlights include: total sales including franchisees of 1.6 1.6 billion, up 0. 0.9%, with total owned sales of $1.53 billion, up 4.7% on FY 2025.

Owned retail sales of $1.4 billion were up 4%. Wholesale sales of $172 million are up 10.8%.

Vertical owned brand sales of $137 million, approximately 9% of total sales with improving margins year on year. 876 stores across Australia and New Zealand, with 43 new stores opened during the year.

Sports Direct open at Fountain Gate and Chatswood Chase during FY 2026, and 17 The Athlete's Foot franchise buybacks were completed. Turning to the overview on page 6.

FY 2026 was a year of significant strategic progress. I am pleased to report that the business delivered underlying EBIT of $105.3 million in a challenging macroeconomic environment.

Under portfolio simplification, we closed the loss-making Glue and Ozmosis businesses and exited the low-performing Herschel, Superga, and Dickies distribution brands, removing approximately 7. $17.8 million of losses on an annual basis.

On the growth investment, we launched and expanded Sports Direct with three stores plus online now currently trading, and continued The Athlete's Foot franchise reacquisition program with 17 franchise franchisees acquired. On the cost and efficiency, we improved underlying cost of doing business by 80 basis points on FY 2025, and completed a material support office restructure reducing over 100 roles.

On the strategic direction, we released the 2030 strategic growth plan, and developed a material cost out plan for benefit in FY 2027 and beyond. Finally, the 2030 strategic growth plan is progressing well.

I will now hand you over to Matthew Durbin to talk you through the details of the results. Thanks, Matt.

Thanks, Daniel. Total sales including The Athlete's Foot franchisees were $1.63 billion compared to $1.62 billion in FY 2025.

EBITDA was 278.9 billion million compared to $288.8 million in the prior year. EBIT before the non-cash goodwill impairment was $82.6 million, above the midpoint of the guidance range of $79.5 to $84.5 million provided in our trading update on the 4th of May.

Before the $2.1 million of advisor costs relating to the Frasers Group takeover proposal, operating EBIT would have been $84.7 million, just above the top end of the guidance range. Underlying EBIT was $105.3 million.

This is reported EBIT adjusted for $71.2 million of significant items, those being $17.8 million of losses from closed businesses, $2.8 million of restructuring costs relating to the cost out program, $2.1 million of advisor costs, and the $48.6 million non-cash goodwill impairment. Underlying net profit after tax was $51 million, with underlying EPS of 8.5 cents per share.

Statutory EPS was -2.3 cents per share. Reported EBIT post the goodwill impairment was $34 million, and the statutory profit result was a net loss after tax of $13.8 million.

The $48.6 million goodwill impairment is a non-cash charge and the technical outcome of the company's annual goodwill impairment assessment, which involves forward-looking assumptions and the exercise of judgment. Importantly, the impairment does not of itself affect the company's cash flows, banking covenants, its ability to pay dividends, or its day-to-day operations.

Turning now to the operating review. Owned retail sales 1.

$1.4 billion, up 4. 4% on FY 2025.

LFL retail sales for the full year were down 0.5%, with half one up 0.9% and half two down 2%. The group added 43 new stores and closed 59 stores.

The closures combine comprised of 22 Glue stores, Herschel and Superga stores, together with 37 stores across other Accent banners where sustainable rental outcomes could not be achieved. That 37 included 17 Vans stores as part of the brand's optimization program.

So 20 stores closed in the normal course based on those sustainable rent outcomes. There was a strong retail performance across The Athlete's Foot, HOKA, Stylerunner, and others.

And 48 Nude Lucy stores are now open, with another record year of sales and profit for Nude Lucy. Wholesale sales were $172 million, up 10.8%, driven by HOKA, UGG, and the addition of Lacoste.

Vertical owned brand sales grew to $137 million, representing approximately 9% of total owned sales with improving gross margins year on year. Now turning to the growth plan update.

The key initiatives under the 2030 strategic growth plan released to the ASX on the 13th of May are progressing well. The plan targets at least $1.9 billion in sales and a 9% plus EBIT margin and 950 stores by 2030, built around three pillars of efficiency, evolution, and expansion.

On operating efficiencies, the approximately $40 million in gross cost savings program identified through to 2028, representing a net benefit of 15 to $20 million, is on track. Of this, there's $30 million of gross savings and a net benefit of 10 to $15 million that has been actioned for FY 2027.

Savings are being realized across support office teams, occupancy, retail teams, IT, and marketing. We have a significant number of AI-oriented projects that are being deployed to support further efficiencies into FY 2028.

These savings are structural in nature and are expected to persist and compound through FY 2027 and FY 2028. Looking at store portfolio optimization, we've flagged that 102 stores are under review as they come up for lease renewal.

With these renewals, this should support an EBIT uplift of at least $7 million by 2030, with a targeted FY 2027 benefit of at least $2 million. The Athlete's Foot reacquisition program remains on track and is delivering incremental EBIT as corporate ownership increases.

This program is expected to contribute around $14 million of incremental EBIT by 2030, including $6 million in the FY 2027 year. The longest dated franchise agreement expires in August 2029.

On customer and digital, the company has more than 10 million contactable customers and 29 websites across the portfolio. With continued investment in CRM, personalization, and digital experience, along with AI tools being deployed to support customer engagement and marketing efficiency.

Turning to Sports Direct. The Sports Direct continues to expand, with eight stores plus online expected to be operating by December 2026, and the continued rollout across ANZ in line with the retail agreement.

Store rollout is on track with the plan laid out in the retail agreement with Frasers Group. The Sports Direct online channel continues to grow, and the business traded well during the FIFA Men's World Cup period, providing a tailwind into FY 2027.

Management has continued to work constructively with Frasers' operational teams in building the Sports Direct business in ANZ in accordance with the strategic partnership agreement. Turning to new store expansion and brand growth.

43 stores opened in FY 2026 were led by HOKA, Skechers, Nude Lucy, Lacoste, and Sports Direct. The strong performance in brand portfolio and growing vertical brands position Accent well for FY 2027.

Note that in the May strategic plan, we called out, yeah, a target of around 20 plus new stores, excluding Sports Direct, to continue to open each year, and that and that that remains in place. The Frasers Group strategic retail agreement, turning to slide 12, continues to provide access to global brands, product, and supply chain benefits.

Online sales have outperformed our expectations, and week-on-week sales in all stores have continued to grow as customers engage with the brand. Fourth store at Miranda was opened since year end, and eight stores plus online are expected to be operating by December 2026.

For The Athlete's Foot, 17 buybacks were completed in FY 2026, with FY 20 with 28 franchise stores remaining. The TAF network is around 160 stores, comprising 132 corporate stores and 28 franchise stores.

This is against 146 stores in FY 2017. Results achieved from the reacquired franchise stores have been in line with expectations.

Dividends and trading update. The board has declared a fully franked final dividend of 1.25 cents per share to be paid on the 14th of September 2026.

Total dividends for FY 2026 are 4.5 cents per share, and this compares to 7 cents per share in FY 2025. Compared to reported EPS before the goodwill impairment, the dividend represents a payout ratio of 78%, which is at the top end of the board's target range of 60% to 80% of net profit after tax, excluding the non-cash impairment goodwill impairment.

It remains the board's intention to continue to pay fully franked dividends out of available cash flow, with the target ratio subject to circumstances at the relevant time. Turning to the trading update and outlook.

Total owned sales, excluding the loss-making businesses we have exited, are up 3.2% for the first seven weeks of FY 2027. LFL sales for the first seven weeks are down 2% on the prior year.

Pleasingly, gross margin percentage for July was up on prior year. We're encouraged with trade in the first seven weeks, which has improved compared to the fourth quarter in respect of both sales and margin tracking.

The trading environment continues to be volatile in the opening weeks of the year, noting that sales into August showed further improvement over July. The performance sports category, including The Athlete's Foot, remains resilient and has achieved positive LFL sales, as has Nude Lucy.

Sports Direct has performed well, leveraging the World Cup, and week-on-week sales tracking continues to improve. Continued strength in sport provides high conviction with respect to the ongoing strategy to complete The Athlete's Foot's reacquisitions and to drive the Sports Direct rollout.

For FY 2027, the company has a range of high conviction initiatives to drive EBIT growth. Leveraging off the FY 2026 underlying EBIT of $105.3 million, the initiatives already underway as part of the 2030 strategic growth plan include 10 to $15 million of net cost savings, this being approximately $30 million of gross cost savings net of inflationary increases.

These savings have already been actioned for FY 2027. There's an estimated 10 to $20 million in gross margin upside from FX hedging, noting that the Australian dollar to the US dollar is currently sitting around 71 cents.

An estimated $10 million benefit from The Athlete's Foot franchise reacquisitions, store portfolio optimization, and new stores. These growth initiatives for FY 2027 were put in place to ensure the business could maintain an acceptable level of profit in a trading environment where LFL retail sales were up to low low single low single-digit negative.

Now taking you to the financials. Underlying gross margin, excluding the closed businesses, was 54.1% compared to 54.9% in the prior year.

The currency movement year on year impacted the result by a further 40 basis points. The result reflects the trading conditions and the heightened promotional activity, a disciplined approach to inventory management in a low sales environment, and the lower AUD.

Underlying cost of doing business was 45.6% compared to 46.6% in the prior year. Meaningful cost savings were achieved in the year across support team, occupancy, IT, and marketing, reflecting the company's focus on operating efficiency as part of the 2030 strategic growth plan.

Turning to the balance sheet on page 17. Inventory of $334.8 million was up on the prior year of $308.5 million.

The increase reflects the timing of goods in transit, $5.8 million; The Athlete's Foot reacquisition program of $5.1 million, that's the inventory associated with that program; HOKA inventory increase of $2 million; Sports Direct of $9 million; and Lacoste of $10.3 million. The remaining increase relates to wholesale expansion and the timing of new stock purchases.

Aged inventory is clean, and inventory remains well managed. Turning now to net debt and cash flow.

The underlying business improved net debt by $8.6 million over the year to $91.4 million. The closed businesses has a net debt or cash flow impact of $10.2 million, reflecting the losses associated with Ozmosis, Glue, Herschel, Superga, and Dickies.

Strategic growth investment accounted for $39.5 million of investment, being $12.3 million for Sports Direct, continuing to utilize the $60 million in subscription funds received in May 2025, and $27.2 million for the reacquisition of 17 earnings accretive Athlete's Foot franchise stores. This has been our biggest year of acquisition of Athlete's Foot franchise stores to date.

Net debt implies a leverage ratio of 1.18 times, which is well within the board's tolerance range for gearing and the company's banking covenants. As at the 30th of June 2026, the company had $60.9 million of undrawn committed facilities and a further $64.2 million of at-call funds within its funding agreements.

During the year, we completed a debt refinancing, increasing the total facilities by $102 million to $372 million on improved terms, including an improved margin and tenure out to December 2028. This provides a robust capital structure and the flexibility to pursue additional growth opportunities, including potential new distributed brands.

Coming to capital investment on page 19. BAU capex on new stores, refurbishments, and IT was $32 million in FY 2026, down from $42.2 million in FY 2025.

This reflected the reduction in the number of stores, the number of new stores that were opened between 2025 and 2026. BAU capital for FY 2027 is forecast to be about $30 million.

That will be ultimately dependent on the number of new stores opened. The Athlete's Foot reacquisition investment was $27.2 million in FY 2026, and is forecast at around half that level based on the acquisitions, the reacquisitions that we believe will occur in FY 2027.

There's more than five reacquisitions planned, and as we get into the the the remaining franchise stores, they tend to be the better performing ones. Sports Direct investment was $12.3 million in 2026.

That comprised of the capex, the working capital, and the investment in the operating operating the business. That amount is estimated to be 15 to $20 million in FY 2027.

Combined growth investment in Sports Direct and The Athlete's Foot remains at about 50% of the investment mix in 2027, with the BAU expenditure broadly constant. I'll now hand back to Daniel to wrap up.

Thanks, Matt. Before we take questions, I want to acknowledge the resilience that the Accent team has shown in navigating a challenging year.

The business has made and executed a number of difficult but necessary decisions: closing loss-making businesses, tightening costs, and articulating the 2030 strategic plan. The benefits of those actions should start to show through in FY 2027 and beyond.

We are encouraged by the early trade from Sports Direct, including the opening of Miranda since year end, and the strong performance of the online channel. Our hedging position is expected to provide gross margin support into FY 2027.

Finally, I'm proud of the team, who remain focused on driving profitable sales, tightly managing costs, and executing our key growth initiatives. That concludes our presentation today, and we would be happy to take any questions.

Thank you.

Hi Daniel, hi Matt. Can you guys hear me okay?

We can. Thanks, Sam.

Great. Just look, given how difficult industry conditions have become after you provided guidance in May following the federal budget, well done on this result.

It's pretty good.

Thank you, Sam.

There's

a unique situation here. On one hand, you have Frasers trying to take over Accent, and their bidder's statement contained some pretty critical things about Accent and the board.

On the other hand, Accent still has to work in partnership with Frasers to roll out and execute Sports Direct into Australia. Can you give us your perspectives and insights as to how the relationship is going and what you need from Frasers for Sports Direct to be a success?

Sam, we have Dave Forsey on our board, and the relationship with Dave is good. He's currently in the country and visiting stores, and obviously attended our board meeting.

As per our agreement, we channel everything through Dave that I need to channel. Primarily, my team with Dave and Dave's team are working very collaboratively in regards to all things Sports Direct.

Whatever else the Frasers Group wants to do is going to be a question for them. From my point of view, personally and, this is the drive I've got with my team, we are focused on seven or eight different items that hopefully will deliver what or at least I'm confident they'll deliver of what we're setting out to do in what we've advised the market.

I'd like to sort of give you a couple of those, Sam. We've got Vans trending up.

We've got HOKA absolutely firing. We've got Lacoste making good noises.

Our cost control should see a significant amount of cost dropping to the bottom line. We've got FX going our way.

We've closed Glue and MySale, both drags on our earnings. Our TAF buybacks are positive, and our TAF business, being in that sports space, is very positive with the team just doing some amazing things there.

Our wholesale business is positive. At the end of the day, the Sports Direct, we've got another four or five stores to open by December 1st.

If you go into those stores and if you to ask yourself a question, have we shown up? We certainly have.

As soon as we get more of those stores on ground, the marketing engine will be turned on, and that's why I feel confident with what's going on. Every other question to do with Frasers, I think has to go to our chairman or Frasers itself.

Okay.

Thank you. Can we unpack the outlook in a bit more detail?

Appreciate there's language in there referring to an acceptable level of profit. To help us understand it better, if like-for-likes continue at say a negative low single digit, is meaningful EBIT growth possible?

What are you planning in FY 2027 around like-for-likes? Yeah.

Sam, I think it's difficult to provide more color than what we've put in the announcement. There's a couple of factual things.

Underlying EBIT was $105 million, and we've put that on purpose in the outlook statement, because that's clearly a number which is last year. In the absence of giving guidance, which we're not intending to do and haven't done, that's a benchmark which is considered to be a reasonable benchmark.

It's clear that we've got a range of valuable initiatives that have largely already been implemented or have a high level of certainty. It's also clear that trade for the first seven weeks at -2% comps remains challenging.

We're pleased that margin's up, and we've said that we can deliver an acceptable level with slightly negative comps. Whether that's less or more than last year, I think we've got a long, long way to trade, and let's see how margin and comp sales progress as we get towards November.

Clearly, November, December, and January are the biggest and most critical months, and I think it will be difficult to provide much more color until we get through those months. All right.

No,

that's clear. Last one.

Assuming there's no change in the consumer based on what you've seen to start FY 2027, how much of the 10 to $20 million FX benefit do you think you will bank and won't need to be reinvested? Yeah.

Look, I think that's a similar answer to the one previously. What we know is that the dollar is trading at 71 cents.

We also know that, because we've put it in the slide, that our average achieved currency rate last year was 65 cents, and our average hedge book going forward is 69 cents. What's in place today already is a hedge book that's a 4-cent improvement over prior year.

I've previously called out as a very general rule of thumb, every 1% is about $5 million of gross margin benefit. If we get to keep all 4 cents of that, that's $20 million.

If we have to trade some of that away or more of it away, then that's what we don't know at the moment, which is why we've put a range of 10 to 10 to $20 million. The other thing we've said is that we did achieve an increase in July in gross margin, which is positive.

That was inclusive as well of the currency benefits that we had available for July. The promotional environment remains intense, and the trading environment remains volatile, and the macro remains challenging.

Great. Thanks, guys.

Thank you, Sam.

Good morning. Hi Matt and Daniel.

Hi, Sam.

Just following on that from the last comment. The gross margin uplift in the trading update is all FX.

Can you give us some measure of sort of in terms of the basis point benefit you're seeing from that? I know it's only one month.

Yeah.

Look, Sam, it's too early to tell is the answer. Mathematically, a $20 million improvement from currency is more than 100 basis points of improvement, and $10 million is less than 100 basis points.

I think that's as much as I can say on that at this point.

Just in terms of your earlier commentary, can you talk about the level of investment you'll need in Sports Direct? Because that I would think would still be a net negative in terms of level of investment versus where the platform's sitting at the moment in terms of profitability.

Yeah. In respect of Sports Direct, we've called out a range of total investment in Sports Direct in the FY 2027 year of 15 to $20 million.

We are investing heavily in marketing in Sports Direct, and indeed have some commitments in the retail agreement in regards to marketing. As we're building the store base with that marketing investment ahead of the curve, I expect there'll be a net operating outflow associated with Sports Direct in this coming financial year, which is why we've flagged that 15 to $20 million cash investment.

On an EBIT, would it be a net detraction of what, $4 to $6 million or something like that? Is that a fair Look,

Sam, that's a reasonable estimate. It's a reasonable estimate.

Okay. Then

on the TAF, just to clarify that, you called out $10 million benefit for the outlook there, but I remember it was $6 million in your strategy day pres. I'm a bit confused there.

What's the difference there and which is correct?

Yep. The $10 million is correct, and that comprises of three elements, Sam.

So $6 million in relation to TAF; $2 million in relation to the store optimization program, which, for fear of throwing around gazillion numbers, that store optimization program was a total of $7 million out till 2030, and the FY 2027 component of that is around $2 million, we're hoping at least $2 million, which bridges to 8; and the other $2 million then coming in from new stores. Hopefully that clarifies for you.

Yeah.

Just on the brand owners, are they starting to put prices up as they launch new products in terms of the starting price point on the back of the old price inflation backdrop? What are you doing in terms of managing your gross margin?

Are you passing that on to consumers and what's the customer response been to those price increases?

Sam, there has been some of that, and where we've had to increase prices, resistance is not obvious. I dare say that we will see some prices going up, yes.

Right now, it's minimal silhouettes that we've seen go up. Okay.

Just finally on your lifestyle banners, what's the sort of delta between like-for-like on your performance versus your lifestyle? Are your lifestyle still the major predominant drag, and any color around the level of drag from lifestyle?

Thank you. Oh,

look, I'm not going to sort of go into detail on that, Sam. You can read through that again our comps for the first seven weeks are down 2%, and we've said that the sports category is positive.

Mathematically, the lifestyle category is going to be worse than -2%. I just think that reflects the challenging environment in that sector at the moment.

Okay.

Thanks for the time. Yep.

Yep.

Thanks, Sam.

Chaps, can you hear us?

We can. Hi, Chris.

Hi, Chris.

All right, chaps. Thanks for taking my questions.

I do have quite a few, but obviously in the interests of time, I will just stick to three. First one is probably for Matt.

Why do you think holding your discount rate flat on the goodwill impairment assumptions is correct when market conditions, including rising inflation and the base rate are deteriorating? Following on from that, your EBITDA growth is also increased year on year when, again, the same point, market conditions are deteriorating.

Yep.

Thanks for that, Chris, and reasonable questions. We feel as though the discount rate that we've had historically has been at the conservative end of the range.

We have in-depth discussion with our auditors about a reasonable range, and they take an independent view of that range as well. Given historically we feel that that range has been at the more conservative end, we didn't feel that there was any need to change that this time round.

In respect of the five-year growth rate that we've applied for impairment testing, we feel as though the business is at the bottom of the cycle. There are also a number of initiatives, I'm going to call them in our control and not requiring capital investment, including the cost out initiatives, including the improved currency rate in particular, that we feel it is reasonable to have a growth rate.

I'll say for those of you who have delved into the depths of the notes, that growth rate is 2.2%, and previously it was 1.6%. We feel as though 2.2% is still a very reasonable position given all of those initiatives.

I suppose on the discount rate, that seems like moving the goalposts to suit potentially. On the EBITDA, again, it's the classic hockey stick, which we all know and love in accounting world.

I still think those assumptions are quite punchy, and I guess we will see what happens. My next question is EBIT margin related.

We talk about an EBIT margin of 9% plus in your 2030 plan, but it's actually gone backwards this year. How do you reconcile still getting to that 9%?

Yep.

Thanks for that question. Again, there's a couple of elements, and the most significant of those is the currency.

We put a chart in the back of the pack that shows what's happened to margin and currency over the last three or four years, and you can see there is a strong correlation. I think again going back to some of those numbers I referenced with Sam earlier, with the Aussie dollar sitting 70 cents, in fact it's very long-term average by the way is about 70 cents, that's a straight out benefit, assuming we don't have to trade it away, of more than 100 basis points at the gross margin level.

On the other side of the coin, we've taken out $30 million in gross cost savings in FY 2027, and we've targeted for a net benefit of 10 to 15 after inflation. We've targeted a further $10 million for a net benefit of $5 million in 2028.

I will add that we're well progressed identifying where that next $10 million is going to come from, and we're going to get amongst implementing that between now and May next year. Frankly, if conditions remain where they are, we may well need to go harder into the cost space.

We're not ruling that out, and if we need to, we'll do that. If I look at those elements, and then I look at the underlying margin without the loss-making businesses, you can relatively easily bridge to a number that's high 8s or early 9s.

I hope that makes sense, and again that remains to be seen, but we're doing our very best to make that happen.

I suppose you started with talking about the currency, and if you can predict the currency rates, Matt, you're in the wrong job, and you can pick my lottery numbers, frankly. I would be more conservative on them, personally.

Okay. Thank you for that.

Then I've got one final question. Free cash flow.

As far as I can tell, free cash flow is negative and net debt has increased. Wondering how you can justify continuing to pay dividends when that is the case.

Yep. If I excluded our loss-making businesses, and then look at the investment that we made in The Athlete's Foot and in Sports Direct ahead of the curve, I acknowledge in this year, with those investments, operating cash flow was negative, that's a fact.

There's three things moving forward that we feel as though are going to be very supportive of the dividend, and those are the cost out again that we've taken and the impact that that's going to have on earnings, the operating cash flow in the coming year, and as you can see in next year, lower investment required in The Athlete's Foot, and we'll start to get benefit coming in from that. Look, the dividend consideration is an important one.

We've also said at the board that we're going to pay at 60% to 80% of profit after tax, and over time, that's a very sustainable ratio.

That's all the questions I have for today, Matt. We'll catch up later on the others.

Thank you.

Appreciate it. Thank you, Chris.

Hi guys. Hopefully can hear me?

Yep, we can. Thanks, Chami.

We can, Chami. Done getting through the tough year and seems like reasonably a good start to the year, relevant of the trading conditions at the moment.

Maybe two questions from me. You did talk to a level of improvement in August for few retailers.

We have seen this, and that's even as GP margins are getting that benefit from FX, but maybe could you talk to the key drivers here and maybe as a bit of an outlook into the key trading period, which categories are showing a bit of the improvement?

Chami. July We started to feel a little bit of momentum in July in some banners, particularly in anything to do with sport, as we've been calling out for a while.

It continues to be very resilient. August again was challenging, positive.

I think a lot of it's got to do with just simply some new products that have come to market, although I maintain that innovation still seems a little bit weak. Certainly there's been an uptick, particularly with two brands for us: one was ASICS, one was New Balance, and that's been quite solid for us.

I guess I tend to wait for the P&L to make any decision. That's when decisions are made.

This cost control and cost reviews that we've done are really starting to show benefits for us in terms of earnings. There certainly has been some sort of momentum shift, and I can't go as far as saying it's fantastic, we're punching the air, because we're not.

There has been a bit of an uplift in just a little bit of momentum across the businesses. Athlete's Foot continues to be very resilient.

Thanks for that, Daniel. Then just on an underlying level excluding FX, how has the promo impact on the GMs been versus last year for the start of FY 2027?

Thanks, Chami. You can see that promo certainly had an impact in last year, and I would say that that's sort of continued at a similar level of intensity.

As we get further and further into this year, that's already in the base. The unknown is whether it ramps up more as we get towards November, December, and January.

With tight macro, that's certainly a possibility. I wouldn't say that promotional intensity has abated at all at this point.

Hopefully that helps. I think the consumer is still chasing value.

There's no doubt about that.

Perfect. If I can squeeze in one more just on Nude Lucy.

I think verticals are growing at 7%, assuming that Nude Lucy must be growing much faster. Just could you talk to basically the performance in that division?

Look, Nude Lucy has been really really strong in terms of its performance. Mathematically, you're absolutely right.

We had a lot of stores annualizing this year, which was great, and comps positive both last year and into the first seven weeks in Nude Lucy. We've also got some other things going on, which I'll throw to Daniel to talk about.

Further to that, we've certainly learned a lot through the journey of Nude Lucy, and we've got an amazing team that run that business. The product innovation has been great, and obviously the most important people, being our customers, are voting positively.

On other good news that I'm certainly excited about and my team are, we've got a few stores open with a new business called Ode, which is O-D-E, and we will very shortly launch a website. The brand is performing exceptionally well within the Stylerunner business, and it's the same story as Nude Lucy.

We trial a couple of stores just as pop-ups, and they've been solid. We officially will open at Warringah Mall and Miranda, and potentially a third store all before December 1.

The new product pipeline looks terrific, and it's obviously enjoying what others in that vertical space enjoy, which is the much higher margins, but very exciting for us.

Perfect. That's great.

Thanks for that, Matt and Dan. Thanks for taking my questions.

Thanks, Chami.

Hey, Daniel and Matt. Thank you for taking my question.

Just a point of clarification on the July trading update and your commentary around gross margins. I think at the half year, the wording we're using around gross margins is continuing business, and now gross margins is up for July year-over-year.

Just to clarify, is that when comparing to the underlying business that still continues into 2027? I.e., is the PCP you're comparing to artificially lower because you had MySale and Glue in that?

No, that's a like-a-like number, James. You've really got to exclude those from the base, otherwise it's not a fair comparison, because you're going to get a lift straight off the back of that.

It was improvement with those out of the base, if that makes sense. Yep.

That's very clear. Yep.

That's very clear. Then maybe just a follow-up.

By my numbers, if you back out kind of the trading, particularly into May and June, I know June last year didn't hit expectations either, and against that this May, June also looked pretty negative, and clearly the macro environment's pretty tough, we've heard that from a number of retailers. Do you mind giving us a little bit of color on May and the June promotional periods, and what you think didn't work, what consumers were telling you?

Look, I think I'll deal with a couple of bits of that, and then I might throw to Daniel to talk about promotions through that period. We were trading pretty well actually up until the end of March last year, and the macroeconomic environment, the geopolitical events that sort of started to ramp up in April, I feel impacted us right through that April, May, and June period.

What you say is correct. It was a poor period over a poor period the prior year.

We can't back away from that. I'm attributing a fair bit of that to that macro and geopolitical environment.

We certainly went hard on promotion through that period to make sure we got our share. The question is what would have happened if not for that.

There's a lot of volatility in petrol prices and many other things through that period. It's a little bit of a crystal ball.

We can't back away from it was a tough environment over a tough environment.

James, you're right. Of course June is a really strong period for us, or supposed to be a strong period, with the all-important mid-year or June sale, as we call it.

Both last year and this year, they just haven't fired to, I guess, many retailers' expectations. Thankfully, from our point of view, I'm really proud of how the team managed our inventory.

Our inventory is clean. As you're aware, we've got some of the best part of $250 million or a bit more of inventory, any mistakes there really cause issues.

We are very well controlled, and all our sights are on what are we going to do in November with Cyber. That's going to be a very, I guess, telling story, but I'm very excited about what the team's put together.

Great. Thank you very much, guys.

Hi guys. Can you hear me?

We can. Hi, Aryan.

Hi. Hope you're well.

Just a few quick ones for me, please. Just on the $10 to $15 million in net cost out, is that assuming 0% to 2% like-for-like growth per the strategy day?

Is that first part of it? Yep.

Sorry, you just broke up there, mate. Would you want me to answer that one and then we'll move on to the Yeah.

Yes, please.

I get the question. No problem.

Yes. In the strategy day, we put that was in an environment of 0% to 2% growth, that there would be 10 to $15 million.

Clearly comps for the first seven weeks are below that 0% to 2% range, so, yes, we won't bank 10 to $15 million of those into the EBIT if comps continue to go at 2% for the rest of the year. Does that answer the question you're asking?

Yeah. The second part of that is just on my numbers very roughly, the fixed cost inflation assumed within the sort of net number is only about 2% to 3%, which seems relatively low considering EBAs are running at 5% and rent inflation.

What explains that, please? Yep.

Look, we assumed high 4s inflation in that number in terms of the frontline team costs. We worked very hard in all other areas of our business to keep costs under control just in the normal course.

I sort of acknowledge that there's a couple of percent in it. It probably goes a little bit to the range of 0% to 2%.

If you're at the upper end of that range of 2%, it offsets a lot more inflation than if you're at zero, it doesn't. I think that's the best explanation I can give to that.

Gotcha. Then just to clarify the prior question.

Is it reasonable to assume Sports Direct is an incremental $4 to $6 million EBIT trading in '27 on '26? FY 2027 EBIT from Sports Direct will be $4 to $6 million lower than FY 2026?

Yep.

Similar to the answer I gave to Sam's question there, and we haven't put out a specific number, but $4 to $6 million is a reasonable estimate. Yeah.

Incremental, that's not absolute.

Yeah. Got it.

Then

can I just clarify Daniel, I think you mentioned August like-for-likes are positive. Do you actually mean that that's up year-on-year, or just saying positive momentum?

Positive momentum.

Positive momentum.

Positive momentum, mate. Yeah.

Not positive. Yep.

That's it. Sorry, very last one.

Just the new Fair Work employment rates for the youth wage rates, can you give us an idea, please, on just because that starts from the 1st of December this year, just what the impact will be to EBIT this year and then '28 and '29, and whether that's sort of factored into the net cost out as well,

please? Yep.

I've previously called out our best estimate of that cost over the duration of the increase, which is three years from memory, is $5 million or just over $5 million. It's just over $1 million a year, $1.3 million a year each year, and that is factored in to our plans.

Perfect. Really appreciate it, guys.

Thank you. Yep.

Thanks, Aryan.

Morning, Daniel and Matt. Thanks for taking my questions.

You just called out 102 stores that are still under rent review. You closed 37 in '26, there's obviously fewer stores in the base.

Is that 102 net of the closures that you called out, or is that another 102 that we could potentially see closed over the next few years? How are those going, and if you could give an indication of how many you expect to close on a net basis would be helpful.

Yep. I'll have the first go on that and then I'll let Daniel talk to market conditions on that, Garth.

The 102 is what's coming up for lease expiry between now and 2030, it doesn't really include what we closed this year, because we only sort of set that out in May. There might be a couple of those that closed in the May-June period, but largely it's 102 over the next period out till 2030.

Look, I'd hope that we don't have to close 102 stores or anything like it, and indeed, we have pretty good success and we get to a pretty good commercial outcome with most of our negotiations with landlords. Having said that, if you look at the, I'm going to say, the net closures that we would have preferred probably to have come to some deal with the landlords on, there were 20 of those that closed in the 2026 year.

In fact, that was not a dissimilar number to what closed in '25. If we talked about 20 closures a year, 20 to 25 closures a year over the next three years, that would not be an unreasonable place to think that that's where we might be.

Mathematically, I'm going to say that's 60 or 70 of those 102.

Garth, we're we're being quite disciplined here. If the stores are if they're just not showing the right returns, even if they're profitable, we're we're having a real good look at these stores and simply not renewing, or indeed we are we have the ability to convert to a different banner, and in some cases that's worked very well.

An example of that is we've closed or converted a heap of Vans stores that simply haven't been working over the the past few years with that brand, and because of that work, particularly into July, August, we're starting to see great benefits so much so that the Vans retail business is is currently no longer a drag.

Terrific. Thanks.

Then the seasonality of the business, just with the trading that has been difficult has shifted. When is your expectation that it reaches something that is more normal, or are you expecting that sort of very big accentuated first half to continue?

Oh,

I don't know, Garth, is the answer. I would hope that we'd start to get back to a more normal, I'm going to say, trading and EBIT pattern.

If you look historically, it's been sort of 55% first half, 45% second half. That hasn't been the case for a couple of years.

It's a little bit like how long's a piece of string, I think.

Fair enough. Then just the inventory build, you guys seem to be quite happy with that.

It's well up on last year. There are obviously store rollout initiatives, but highlighted that the store base is smaller.

What gives you confidence that inventory will remain clean and you're not going to have to be promotional just to clear those levels? Yep.

Look, again, that's a good question. No doubt where comps were challenging last year, there were pockets of inventory that emerged that we had to deal with through May and June, and we called out that part of the impact in gross margin last year was that impact of having to clear through inventory in a low margin environment.

We've planned for this year at a much more conservative level of inventory than we have, in fact ever before. Let's see how we go.

The aged inventory is clean. We've got a pretty good track record over many years of managing this, and I feel as though we're in okay shape.

Garth, some of the increases in that area in terms of inventory, keep in mind we've now opened the three Sports Direct stores. We have a further two or three stores' worth of stock in our DC for the stores that are coming, and we've also put on the Lacoste brand.

Great. Then just in terms of the wages, where are those savings coming from?

Are you cutting at store level? Because it feels like there shouldn't be a lot to go there.

If it is, you called out IT and back office, and is that impacting the business internally from a cultural perspective, and how are you managing that?

Let me just answer the frontline, and then we can talk about the cultural impact. Look, it's a matter of record we've taken 100 heads out of support office.

If I think about the stores teams and what we've done there, that's been a very, very detailed benchmarking exercise. To put some color around that, we have some stores that are, I'm going to say, very similar size, very similar turnover in the same banner.

For argument's sake, one might have been running on a wage percent to sales of 14% and the other one 16%. What we've identified is that there's no good reason where one can run on 14% and another one that has exactly the same profile should be running on 16%.

All of the benefits in the store wages have come from that benchmarking exercise, and then just being more disciplined on rosters. That is a big part of the $30 million that we've called out for this coming financial year.

We think there's probably a bit more in that in FY 2028, because as everyone gets a bit better, then you take the best and you try and roll that practice through. Let's call it a continuous improvement exercise.

That's led to a big chunk of change for FY 2027.

Of course, Garth, when you action 100 people and they weren't bad people, they were good people. We've simply got to make necessary decisions of how to ensure we move forward.

When you do this stuff, of course morale and culture and stuff takes a bit of a hit, but I'm surprised that it's been okay. We just move on and everyone's doing a little bit more and it's okay.

On top of that, we've now got 50 50-odd people in Vietnam offshore, and it's been quite amazing what we're seeing in terms of their ability and the value they're bringing. It's just a changing world in all that area.

Terrific. Then maybe just sorry if I could squeeze in one last one, just on the wage front and store productivity.

Are you measuring conversion, and are you worried that what you're doing in the store level is what's contributing somewhat to negative like-for-like sales, or do you attribute that mostly just to the product that's not worked that well in the lifestyle banners?

That's a really open question, mate. We don't think what we've done with store wages in stores is impacting our LFL sales.

We're tracking that like a hawk store by store by store as we make changes to rosters, and we haven't seen anything that would suggest that what we've done's impacted it. I think you'd have to put that down to the broader macro.

Yes, we have talked about right now there's not the innovation in lifestyle product globally that we would like.

These conversations are daily with our brands. We are looking for innovation.

We've seen some great green shoots come from ASICS and New Balance, which I think are going to be great for right up into this December. You've just got to take a look at Nike.

The innovation's pretty weak, and once that comes back to where it will and it will, in my view, these things are cyclical, particularly in the fashion space, and I think we should see upside as soon as we get four or five shoes that are different and that the customer wants.

Terrific. Thank you.

Thanks, Garth. We've got time for one more question, guys, in the interests of time, we'll take one more and then we'll wrap up.

Thanks.

Morning team. Thanks for taking my questions.

Just two quickly. Sports Direct run rate.

I think you put some slides in the strategy day, just wondering if you could give us some insight and an update on that.

I can. We had two stores and a website trading in May, and I think we called out there's an annual run rate off that of $15 million.

I'm pleased to say that annual run rate has continued to lift as we would expect it to as we've opened the Miranda store, and we talked about online continuing to run. Look, given we only put that chart in the pack two months ago, I felt it was too early to update that.

I feel like as we get to November, we'll have a few more stores open, that'll be a good opportunity to update on that as we get to that point. We're pleased with how things are going there.

Yep. Okay.

Then just maybe a question around your largest distributed brand, Skechers. How is that brand from a product proposition and value proposition placed in what I guess you'd characterize as a challenging macro?

Skechers, as per usual, has always been resilient. Last year around about this time, or into May, June, July, we had a very, very strong silhouette called the Slip-ins, which was very, very strong worldwide.

It's certainly not as strong this year, but those guys just continue to innovate. There's a new one called the Cozy Fit, I think it is, which is starting to show some great signs, hopefully that takes up the slack and we move forward.

The Skechers stores are very resilient. Online is strong within that banner, and what has been super strong for us in that banner has been our DFO network.

That's helpful. Then just one final one.

A lot of questions around the macro, what gross margins are doing. You've made the comment around promotional intensity being high.

Can you just clarify, promotional intensity is high, but it hasn't actually changed that much, or are you calling out that it's gotten worse, I guess, across the last call it quarter or six months?

No, I think it's been high now for a while, is how I'd characterize that, Alex. No, we're not trying to indicate that there's been a step up.

It just continues. Who knows, this might be a new norm.

If it is, I think we're well positioned to tackle it. Certainly the customer is chasing value.

Every other week, someone in our segment's having a sale or promoting product, and we're making sure we compete. Okay.

That's helpful. All right.

Thanks for your time, guys. All right.

Thanks, mate. Thank you, everyone.

Appreciate your time.

Thank you.