Good morning, and thank you everyone for joining the Accent Group Full Year FY 2024 Investor Briefing. We will begin with a presentation by Daniel Agostinelli, Group CEO, and Matthew Durbin, Group CFO and COO, followed by a Q&A session. If you would like to ask a question, please select the Raise Hand button to be placed in the virtual queue. The Raise Hand button can be found at the bottom of your Zoom interface. Now, Daniel, over to you. Thank you. Thank you. Good morning, everyone, and thank you for taking the time to attend the call today. I'm joined on the call by our Group CFO and COO, Matthew Durbin. We will now take you through the results for the full year ended 30 June 2024, and a trading update for the first seven weeks of H1 of FY 2025. There will be an opportunity to ask questions at the end. Within the context of a challenging economic and consumer environment, the company has delivered positive like-for-like sales, sales growth, and has made continued progress against the growth plan. I would like to thank the entire Accent team and suppliers, and indeed our customers, for their efforts and support throughout the year. The team's ongoing focus on our customers, both online and in-store, new and fresh product, innovative store rollouts, and the rollout of 93 new stores, continue to build a strong business for us in the future. If I can now refer you to the operational highlights on page four of our investor presentation, which was released to the ASX this morning. Some key highlights include: The opening of 93 new stores, bringing the total number of stores to 895, including our online websites. Our online sales continue to grow strongly, supported by the company's integrated omni-channel model. Our customer database grew by 400,000 customers to 10.2 million customers. Vertical owned brands and product sales grew to more than AUD 125 million, now reflecting around 9% of total sales. 36 Nude Lucy stores are now open and trading well within the business, and were strongly profitable in FY 2024. 5 more stores are planned to open by December 1. Continued growth in our Platypus and Skechers stores, with 49 new stores opened between both retail brands. Our Stylerunner business continues to perform above our set budgets. Both Stylerunner and Nude Lucy will open flagship stores in Chadstone before December, which we are delighted about. We advise today that as an outcome of the continued drive to improve return on investment for our shareholders, our Trybe business, which had 14 stores, has been sold, and we will not continue with the CAT distribution agreement beyond its expiry date in December this year. Along with the exit of the 17 underperforming Glue Stores, these outcomes will allow management to focus our capital and efforts and relocate those to our fastest growing businesses. I now hand you over to Matthew Durbin. Thanks, Daniel. Turning to FY 2024 sales and profit on page five. Total sales for the year, including TAF franchisees, were AUD 1.61 billion for the 52 weeks ended 30 June 2024, up 2.7% on a 53-week FY 2023. The reported EBIT of AUD 110.4 million was in line with the guidance provided in July and was inclusive of a AUD 17.3 million non-recurring charge relating to the decision to exit 17 underperforming Glue Stores. Inventory levels remained clean, with inventory growth in line with store growth. Now, onto the summary of financial performance on page six. Own sales were up 3%, with LFL sales up 1.7% for the year, improving in half two to 4.1%. Within this, our online stores continued to grow strongly, reinforcing the importance of the company's best-in-class omni-channel capability. Within this, own retail sales were up 6.1%, and wholesale sales were down 17%. Gross margin percentage was up around 60 basis points to 55.8%, reflecting a higher retail mix, disciplined inventory management, and our ongoing drive to increase the mix of our distributed and vertical own brands. Gross margin in half two was impacted by an inventory provision of AUD 2.6 million, within the overall AUD 17.3 million of non-recurring charges relating to the decision to exit 17 Glue Stores. Cost of doing business, 45.9%, was a year-on-year increase of 140 basis points and was an outcome of lower than planned LFL retail sales, lower wholesale sales, and cost inflation. Inflation, in particular, in occupancy and in-store team costs. H2 CODB of 46.7% was a 60 basis point improvement on H2 FY 2023, reflecting the stronger comp sales in H2 and the implementation of cost efficiency initiatives in a range of areas impacting Q4 costs and beyond. Net profit after tax was AUD 59.5 million. Moving on to the retail and wholesale operating review. During the year, 93 stores were opened, and 19 stores were closed, including 5 Glue Stores, where required investment return outcomes could not be achieved. New stores continued to perform strongly, with 49 new stores open in Platypus and Skechers, and Nude Lucy now has 36 stores and is trading well. Wholesale sales declined 17%, with softer demand from our wholesale customers and reflecting, in part, the impact of our new store openings. Pleasingly, the decline in half two was less than 10%, a significantly improved tracking rate over half one. Sales of vertical own brands of products grew to more than AUD 125 million, now representing around 9% of sales, and the gross margin percentage in that program continued to improve. Now turning to customers and loyalty. Contactable customer numbers grew by 400,000 customers to 10.2 million customers. This continues to be the result of a strong drive to invite customers to provide emails in store, along with the impact of our loyalty programs now in place across the company. Company has 8.1 million members in our loyalty programs. Membership across TAF, Hype, Platypus, Merrell, Skechers, driving repeat spend behavior and improved customer insights and values. In November 2023, the company launched an exclusive loyalty partnership with Qantas, where Qantas customers can earn and spend points across Accent banners. Early signs are very positive. The average spend on the Qantas- linked transactions is significantly higher than the Accent average, and in addition, where we identify that the Qantas customers are new to Accent, we also have the opportunity to capture their details in our platform for future brand communications. Our new customer data platform went live in July, providing enhanced capability for more targeted customer interaction online and in store. In combination with our internal loyalty programs and new Qantas partnership, the rich insights from this new platform will help drive improved targeting and repeat purchase behavior. Coming on to the growth plan update on page nine. Company continues to have a valuable portfolio of growth opportunities across its core banners and new businesses, including the continued rollout of new stores, with further store rollout opportunities in both its core banners and new businesses. At least 50 new stores are planned to open in FY 2025. Further growth in online, leveraging improved customer insights and loyalty programs. Improved underlying gross margin from continued growth in the company's moat brands, being our distributed and vertical own brands. Along with margin improvements, these brands continue to provide an unreplicable competitive advantage through product access, forward visibility to global product trends, and improved sell-through. Growth in Nude Lucy from the continued rollout of new stores and online growth, with 36 stores trading and further stores to open in FY 2025. In August, the company launched a U.S. online site for Nude Lucy to test customer demand in that market. Profit growth in Stylerunner, with around 10 stores to open in 2025. Finally, continued growth in TAF from profit margin expansion through the delivery of distributed brands, as well as the plan to reacquire the remaining 60 franchise territories. FY 2024 franchise sales were at 170 million. And indeed, finally, expecting further growth from our existing and new distributed brands, including Hoka and UGG, with further store rollout, wholesale and online growth planned in those brands. Turning now to dividends. Trading update. The business has announced a fully franked dividend of AUD 0.045 per share. In terms of the trading update, total sales for the first seven weeks of FY 2025 are up 8.7% to last year, and LFL retail sales for the first seven weeks are up 3.5%. I'll now hand back to Daniel to wrap up. Thanks, Matthew. We are pleased with trade in the first seven weeks of 2025, which is a continuation of the stronger sales trend that we saw in H2 last year. The company has many valuable initiatives for growth over the coming year and into the future. I wanted to leave you today with a somewhat business as usual initiative that goes on every day here at Accent. That is the emerging as a new store source of growth and value. On the back page of our slide presentation, we have an image of our new Platypus store concept at Chadstone in Melbourne. We are very excited with this new concept. In Platypus, and in all of our banners, we are continually evolving our store format, both for new stores and when stores come up for lease renewal. Our Chadstone Platypus store came up for renewal at the end of last year. We renewed our lease and have taken an opportunity to completely refit the store with a new flagship concept. Since reopening the store, we have seen trading up very strongly, with double-digit growth. Having got this concept right, we will quickly roll this out to a further 10 flagship stores in all A-grade locations that are coming up for refit. This update of the store concept allows us to better showcase brands and product, improve floor space productivity, and our competitive position in the market. Thank you for your time today, and we would welcome any questions in relation to the result and our presentation. Thank you all. Thank you. We will now begin the Q&A session. As a reminder, to ask a question, please select the Raise Hand button at the bottom of your Zoom screen to be placed in the virtual queue. Our first question comes from Chami Ratnapala. Please go ahead and ask your question. ... Yeah, thanks for that. Morning, Dan and Matt. Quite a resilient result there. Just keen to get stuck into a few questions. I mean, firstly, to start off with, the trading update, I mean, up 3.5% for the first few weeks. How does this look differently, both in retail and wholesale, from that exit rate of 4% in the second half? Yeah, thanks. Thanks, Chami. So the 3.5% is only relating to retail, so that's the retail LFL, up 3.5%. You get a sense of the wholesale result when we talk about total sales up 8.7%. So the wholesale's wrapped in that. So if you take the 3.5%, you add the impact in new stores and wholesale, and wholesale's been positive in respect of the first seven weeks. So you know, quite a good turnaround. Context of the wholesale, we have to remember, though, is that it was significantly down in the first seven weeks and indeed in the first half last year. So it's great to see a turnaround. We would've expected to. Yeah, 8.7%, we're very pleased with in terms of total sales. Thanks for that, Matt. And if I was to ask you in terms of maintaining it through the rest of the first half, perhaps, maybe remind us, I think the comps start sort of getting less easier towards the back end of the half. How do you feel about sort of where comps are running into the rest of the first half? Yeah, look, I think I don't think we're trading particularly, you know, inspiring comps against the base last year at all, to be honest, right through. So, yeah, our comps in 2024 didn't start coming positive until the second half. That's not to say we didn't have some okay months across November and December, but I wouldn't have said that they were as good as we wanted them to be last year. So, look, you know, I'm not gonna try and predict the future, but 3.5%'s a good start, and, you know, with the product pipeline we've got coming, we're, you know, confident. I think, Chami, exactly to what I was gonna also update there. I mean, we look at our forward product pipeline, and it looks very, very strong across many, many brand banners. In at least from my point of view, much more exciting than what we saw last year. So hoping that the continuation of the comps will be there. Thanks for that, Dan and Matt. Then secondly, quickly on the gross margins, I mean, sort of 57% is sort of a mark that we've talked about. With where you have exited the second half again and thinking about the outlook by FY 2025, how should we sort of think about it? Yeah, look, it's a complex question. You know, there's no doubt that the work that we continue to do in our vertical owned and distributed brands is improving underlying margin. And, you know, we would be very hopeful of trying to drive a further margin uplift as we get into this year on the back of that. Conversely, yeah, there's always the unknown of what currency does. So, you know, sitting today around, you know, mid-60s, 67, yeah, that's okay. And if it holds there, we should have confidence that we might be able to generate a further margin improvement year on year. So hopefully, that gives you some color. We get better each year at our error rates in our vertical. We called out specifically that the gross margin in that program had improved again in FY 2024. That's now five years of consecutive improvement in margin in that program. The margin program in The Athlete's Foot is very strong. So yeah, so those are the types of things. The other dimension there, though, is that, you know, the days of price increases have gone. You know, even though, you know, there's still some inflation, where we're finding. You know, we put prices up now. The last time was July last year, we had any meaningful price rises. There's no, you know, sort of, I'm gonna say, inflationary impact or margin benefit to come from price rises as best we can see for the next 12 months. Perfect. Thanks for that. And then my last question, if that's okay, would be on the new stores for FY 2025. I think the Trybe format was called out. Just trying to see what sort of benefit we get into new stores, or are they counted in this as well, or would they be simple relocations for FY 2025? So, in respect of the Trybe, if this answers the question, and I'll pause to see. So, you know, the Trybe had 14 stores. They've all been sold. So, as we get to the end of the year, they won't be there at all. They won't be noted as closures or anything like that. We'll have a line that says, you know, "Sold," and it'll have, yeah, 14, plus some online stores in there. So that's the story with Trybe, if that makes sense. The store openings, the 50 store openings, will come across a number of different banners. With ongoing store openings in Skechers, ongoing store openings in UGG, in Hoka, Nude Lucy, and in Stylerunner and others. Perfect. Thanks for that, Matt and Dan. Thanks, Chami. Thanks, Chami. Thank you. Our next question comes from Ed Woodgate. Ed, please go ahead and ask your question. ... Oh, hi, team. Well done on the result. I just was curious, I mean, generally, there's a lot of positives in there, but, I think the main thing that if we was looking at one of the blemishes, I guess, was the GP second half was down 20 basis points year on year. So can you just talk through what the reason was for that? Yeah, thanks, Ed. There's the sort of 20 basis points is explained by that AUD 2.7 million or AUD 2.6 million impairment that we took on Glue inventory. That's within the overall AUD 17.3 million impairment. So that bridges to flat. There's no doubt in the back half of the year, May and June, the environment was quite heavily promotional, and we specifically called out that we were going after promotion to both to compete in the market, and particularly that younger customer across Platypus and some of our other brands was responding to promotions. So that's how I'd characterize it. We also made sure that we finished the year with inventories clean. Aged stocks are as good as they've ever been, and we're very, very comfortable with our inventory position exiting the year and coming into this year. So hopefully that bridges that for you. Clearly a tougher exchange rate environment, although we'd never have that as an excuse, but they're the dimensions of the reason that gross margin was flat. I'd say underlying flat in the second half. Got it. That's, that's very helpful, and sorry, just to clarify, so- Yep. May and June in the PCP was tough on discounting, but you're saying it will continue to be a tough discounting environment this, this financial year? Yeah. We continued to be heavily promotional, so, and perhaps more promotional than we thought it would be. You know, the market, I think, because it was a little bit more challenging, there was plenty of people in our segment driving promotion, particularly through the school holidays in June. Okay, sure. And then the store guidance, so that's just seems to be a slight upgrade to consensus. You know, and you said at least 50 stores there. Just curious how many might be in the first half, and what's the negotiating environment like now that you've exited Glue Store? Has that helped, I guess, your credibility with, you know, sticking to good prices with landlords, or what, what's has there been any kind of response to that? Well, good day, Ed. The environment is, as it's always been, it's probably a little bit more positive from the landlord's point of view. There seems to be more customers in terms of foot traffic going into their centers. That's what they're reporting. We're seeing some of the benefits of that, obviously with through our comp growth. Well, we're always held in high regard. We've got, you know, this, our new banners are very, very much sought after, nationally, actually, and, we can only go as fast as, you know, the product and our team can go. But it's positive. Our relationships with landlords is good across the board, and indeed, the reason I called out, you know, Stylerunner and Nude Lucy Chadstone, it's purely because they will be flagships and in very, very key sites. Thanks. And then just the first. How How many would be in the first half? Do you think about 50? We haven't sort of unpacked that, Ed, so let us get to November, and we'll give you an update on that. Okay, sure. And then if I could just ask about the CODB. So that was great to see, down half and half. It sounds like you've implemented some great initiatives there and looking to continue to do so and into out years. Can you just provide some color where those cost savings might come from? And then also, was rostered store hours a part of the CODB saving? And I guess, if that was the case, how much were they down year on year in the second half, and what, how should we think about those into 2025? No, good, good question. There was a number of things impacting that CODB. So with the positive comps that we achieved, you know, 4.1% for the second half, that goes a long way to starting to set some of the inflationary pressures that we'd seen in, in frontline, store costs and, and indeed, rents. In terms of store wage hours in store, there were no cuts made to store wage hours in May and June. So, so we, we continued to invest in those, and indeed, that's continued into this year as well. The areas of cost efficiency that we're really getting after are in distribution costs. So we've done a lot of work on our online fulfillment costs across many different areas. There's a thing called split shipments, which means you end up, you know, sending two parcels out to a customer because a pair of socks is in one and a pair of shoes is in another. We've done a lot of work on our algorithms to reduce that particular component. We've increased our online free shipping thresholds across a number of banners without any seeming impact to sales. There's further initiatives we're looking at in that area. But we actually made some adjustments to our support office team costs. So we, we've undertook in a quiet sort of manner around a 10% reduction in support office team costs through the course of the second half last year, which will you know give us benefits into the first half this year, and a range of other things across in-store bag costs and those things. We're trying to avoid you know touching frontline team costs. Certainly we've still got efficiency to drive there, and where efficiencies can be gained we'll take those. Hopefully that gives you a bit of a flavor. But yes, we were pleased with the cost of doing business, and no doubt the first half cost of doing business last year was too high. We need to crack on in the first half this year and bring that down quite significantly. That would be our absolute objective. Okay, thanks. That's great color. And then just the last question from me, a bit of a double header. So just for our modeling, how much sales and EBIT did Trybe contribute in 2024? And just the reason for the CAT renewal. Sorry if you've already touched on that. No, no. Yeah. So, look, Trybe was neither here nor there in terms of profit contribution in FY 2024. You know, so that's probably the best way to think about it. Not material at all, one way or another. And, you know, look, the overall CAT decision, it was relatively small in the scheme of our business. If we go back, you know, ten or so years when we started to be the distributor of CAT, the EBIT of that was quite meaningful. It's in workwear and, you know, workwear isn't necessarily core. You know, CAT didn't play a significant role in our multi-brand banners, as many of our distribution agreements today do. We just felt that on that basis, it was, you know, it was one that was a little peripheral to what we were doing. Okay. Thanks, team, and well done. I'll jump back in queue. Thanks, Ed. Our next question comes from Tom Camilleri. Please go ahead and ask your question, Tom. Morning, team. Congrats on the solid result in a pretty tricky backdrop. I think I just want to ask a question more around the apparel strategy, just more of a medium-term question. So, just on the, I guess, the great success you're seeing in Stylerunner and Nude Lucy, but Glue was pretty much harder than you initially thought. Is the plan still to get bigger in apparel medium term? And if so, does that imply you need to add another major banner to your portfolio inorganically? Can you just walk us through how that sort of discussion's going internally? Thanks, Tom. Yes, indeed, we're quite committed to apparel overall. The learnings we've had, particularly from Nude Lucy and Stylerunner, and the amazing team we've put together, in a fairly short time, is really starting to show through. You know, we've now got better factories that we are dealing with, who are delivering better products, with better margins, better efficiency. And as I called out, we will open another five, at least five more, Nude Lucy stores by December. In terms of Stylerunner, we've got a brand in there called Ode, O-D-E. It's showing great signs. Again, very early days, but great signs, so another vertical brand that's in there, together with our Stylerunner brand, which is 100% vertical as well. All of these learnings are coming to one team or a few teams, but reporting to one divisional CEO, and we're just getting better at it. And I think that we will further excel this year. In terms of another banner, absolutely, we would love to find one that suits what we do, that is in our wheelhouse, so to speak. Or indeed, we have opportunities with the brands that we have within our banners to potentially roll something else out. But right now, we are totally focused on what we've got, mainly Nude Lucy, Ode, and the Stylerunner brands, which are all vertical. And you'll start to see in our stores an extension of all of those brands into, you know, particularly the gift area and the add-on sales, as we call it, which will all launch in September of this year, September, October. Thanks. That's great, Daniel. And then just on the Nike, I guess, sorry, more on the footwear category. So Nike and Adidas, it seems like they've been pretty soft globally. Like, what's your sort of exposure to those two brands today? And then, like, how much would that be, I guess, a tailwind to earnings if they started to get the products right for you? Adidas has actually been quite strong, particularly in Hype and Stylerunner, very strong. Nike has been a little bit soft, as they've called it out internationally. Thankfully, we're not exposed much at all with Nike and never have been. That has been quite a deliberate drive, purely because margin issues and so on. So I don't think we're gonna get too much of an upside either way with Nike. Adidas is continuing to strengthen. The brands that are doing exceptionally well for us is Hoka, which we distribute. We're seeing great tailwind there and great support from wholesale. It's been very strong. The On brand, you may know the On brand. We are the biggest seller of On in Australia and New Zealand at the moment. Well, it's definitely Australia. I think that'll strengthen. Many of these are growing also within our Platypus banner, which is great news. The emerging brand that we're seeing is Puma, where we have a great relationship. On the back of those three brands and indeed some of the other items that we distribute, we're confident the forward pipeline of product is the most exciting I've seen in years. It's now up to the customer to vote, obviously, and buy it, but that's the feel. Thanks, Daniel. Well done, guys. Thanks, Tom. Our next question comes from Shaun Cousins. Shaun, please go ahead and ask your question. Great. Good morning. Maybe my first question is just on wholesale, just down 16.9% for the full year, and that's an improvement on that 25% decline you had in the first half. Could you just talk a bit about how you were able to expand your wholesale margins on a pre-AASB basis, which you now disclose, and thank you for that. Could you just talk a bit about how you've been able to expand margins, how you've been able to take costs out? Because we're probably more concerned that wholesale is a little bit more of a fixed cost business, but you've been able to do a very good job in expanding margins even though sales have been falling there, please. Yeah. Thanks, Shaun, let me talk to that. So there's a-- Because it's the first time that we're sort of now breaking those out, and we will continue to, there is some year-on-year reallocation in the base. So you know, we're continually looking at allocation of costs. So some of that is reflected but in the wholesale margin. However, what we have been able to do is recognize with some of the wholesale brands where they have been challenging. And you know, we've called out that Vans has been challenging. We have been able to rationalize the particular rep force that we have selling those brands. Centralize that more and rationalize some of the accounts. So there has been some cost rationalization there. Distribution is another area where we've been very focused on working with our distribution partner to reduce distribution costs. So there's a couple of things going on there. I think next year, though, we'll give you a better read, because there is some year-on-year reallocation from the way we allocated last year to the way that we allocated costs between wholesale and retail this year. Great. Thank you. Thanks. Maybe just on Glue. I think your comment initially, maybe a few months or so ago, was around AUD 14.2 million impact, and then you've said now it's AUD 17.3 million. Can you just confirm the difference appears just to be the inventory sort of number there? And more broadly on Glue, maybe was it EBIT positive or EBIT loss-making among those 17 stores so we can think about the outlook? And do you intend to exit all 17 stores, or will you look to put some of your other brands into some of those locations? I'm just curious around the broader decline in store numbers, or do you actually continue to trade under a broader Accent Group in some of those 17 stores, please? Yep, no problem. So the bridge of the AUD 14.2 million to the AUD 17 million is in, actually in half one. There was a small amount that we noted, taken against Glue, and transitions. So that was about AUD 3.2 million-ish. And then, you add that or AUD 3.1 million, and then you add that to the amount that we took in the second half, for a full year impact of AUD 17 million, if that makes sense. And within the AUD 17 million, the AUD 2.6 million sits in there. So hopefully that bridges that. And then in respect of Glue, it's our absolute intent to exit all of those 17 stores. They were loss-making in aggregate, those 17 stores. However, some of those stores we have earmarked as, I'm gonna call, transition stores to other Accent banners. It's only a handful where it makes absolute sense in terms of the locations of those sites and the size of those stores. Sorry. So we'll do that, and so, you know, it's our intent by the end of this financial year that all of those stores will have closed or transitioned. The majority, just straight out closures, with a small handful of transitions where it makes sense. Those transitions, though, we will record as new stores because they'll be new store locations for the banners that they're transiting to, if that makes sense, and they'll be completely refurbished and refit as the new banner with, you know, very, very limited reuse of the current Glue Store. Sorry, the EBIT impact of those 17 stores, so they were loss-making. Yeah. Could you sort of quantify- Look, I haven't- -at all? Yeah, no, I haven't quantified that. Yeah. And won't. I mean, you can assume they're making a loss. The banner overall made a loss, so the ones that we're closing made a bigger loss. But yeah, I'll give more color on that when we've closed them and... 'Cause those losses don't, you know, inherently, automatically all go away this year, because we're still trading some of those stores through this period, so. ... Great. And my final question is just around D&A. It was AUD 98.2 million, and this is on a including lease basis. The market for 2025 is currently at AUD 181 million for D&A. Could you just talk a little bit how we should think about D&A for fiscal 2025? Should we double the second half, conscious that there's store closures that you've announced, but then you've also got your consistent, you know, significant store opening plan. I'm just curious around how we get the right estimate number there for D&A for fiscal 2025, please. On that. So couple of things to think about. Just have to reverse out the impairment, which is sitting in the D&A. So, I think if you, you know, if you took the second half, there's- Apologies, folks. It looks like we've just lost the Accent team. We'll get them back shortly, if you could hold tight. Thank you for your patience. The Accent team will be joining back shortly. Thank you for your patience. It won't be much longer now. Meeting up. Nine, eight, nine. Hello? Hi, team. We've got you back now. Great. Thank you. We were with Shaun Cousins. Shaun, did you want to continue with your questions? ... Yeah, sorry. Just around the D&A. Sorry, Matt, and I got your point around the impairment sitting in there. Maybe just more generally- Yeah. - and then, which obviously sort of takes 14 off your D&A, sort of there as well. But just maybe where you're thinking about D&A ending up, just in that this has been an area where I think for retailers, we've had a bit of a tougher time, particularly on a post-lease basis, sort of forecasting sort of that as well. Yeah, can everyone hear me? Can you hear me now, Shaun? Is that good? Yes, I can hear you now, Matt, fine. Yeah. All good. Great. Terrific. Look, Shaun, I don't know where I got cut off. The thing you need to-- that I think everyone needs to think about is the number of new stores that we've added, and the annualization of those new stores into next year, and then an assumption around the 50 new stores. In terms of the PPE depreciation, that's a little easier, because you know, over the last few years, our property plant and equipment depreciation has been increasing, as we continue to invest in new stores. And if you have a look through our annual report, you get a sense now that that depreciation's caught up with CapEx. So that component of it is unlikely to continue to increase. The real trick now is to make assumptions around where the new stores are. Hopefully that helps. Yep, that's great. Thank you, Matt. Our next question comes from Sam Haddad. Sam, please go ahead and ask your question. Can you hear me? Yes, we can. Thanks, Sam. Hi, Daniel. Hi, Matt. I just wanted to talk about lease renewals on a CPI, based on CPI plus terms. Can you just sort of give more color as to how those negotiations, how far progressed that you are on those leases? Like six months ago, you called out there's quite a few to get through over the next 12 to 18 months. So I just wanted to see how that's going. In that context, your percentage of leases that are currently in holdover. I might start and then hand to Daniel. We've previously called out that the percentage of leases that are CPI exposed are about 24% of our overall leases. The holdover percentage is very small, as it always is. But let me hand to Daniel then to talk about the environment, how lease renewals are going. Yeah, I get... hi, Sam. The environment's actually has been okay for us. And as I mentioned earlier, our relationships with landlords is pretty good. We're going into some of these centers with, you know, seven, eight, and even 10 banners in some cases. I'd have to say that we've had fair outcomes on the renewals. Some great wins, and in a few cases, of course, in the Double A's, some increases. But the overall is positive from where we were, and I think it'll largely continue. I don't put it down to that, to just great negotiation from our side, which it is from our property team. But indeed, we're showing up with banners like what you see at the back page here with Platypus. We're still very much investing in our stores, and that's leading to us being able to, I guess, get an outcome on renewals that's favorable. Okay. Sam, I'll add to that. Yeah, we called out that we had, like, a hundred and fifty, you know, renewals coming up over the 12 to 18 months when we went back six months ago. And you can see we've closed 19 stores, and we've also called out, you know, that we need to drive rent reductions on those, you know, overall on those renewals, otherwise, the escalation you get kills you over time. So you can read into the fact that we've only closed twenty, that those outcomes have been pretty solid. Of the 150, how much have you sort of progressed through? We've done about a hundred of those. At least a hundred, yeah. At least a hundred. Yep. All right. So the bulk of them. That's good. Okay. Yeah, yeah, yeah. Therefore, you know, on the overall, you're saying it's favorable, 'cause some of those were under pressure in the cost base in 2024. Yeah. Therefore, in 2025, do they provide a tailwind to cost of doing business, which you're assuming, and therefore re-leverage? Look, that's the idea. The ongoing challenge is that you continue to have, you know, year-on-year increases, and, you know, inflation's still running at, about 4-ish percent. So, you know, 4%, 4% plus, you know, 1% or plus 2% is 6%. So you've got to keep working really hard. So I think what, you know, the way that I've said that we should think about our occupancy cost as a percent to sales, is that if we can keep that flat as a percent to sales over time, that'll be, that'll be a good outcome, and that's what we're intending to do. Clearly, it ticked up in the first half last year, so it's our absolute objective to get that, you know, back down, to more in line with its long-term tracking rate, and we'd hope to be able to do that, you know, with some positive comp sales coming through. So hopefully that sort of helps with that. Just on the positive comp sales, can you talk again around sensitivity as to where you start to see good re-leverage on that cost of doing business percent? Is it- Yeah, look, a simple rule for that is if we weren't doing anything around the cost of doing business efficiency, is the comp sales have to match the inflationary increases that you're copping in stores. So, so we know last year frontline labor went up 7%. And, this year it's gone up, you know, 4%, including the 50 basis points Super Guarantee. So, and then, you know, rents are still gonna escalate at 3%-5%. So, you know, you have to be getting 3.5%-4% before you put cost of doing business initiatives in to break even. So, you know, in this environment, comp sales have to lift above, you know, 3.5%-4% to get re-leverage. What we will be able to do is, with the cost of doing business efficiency initiatives we're putting in, you know, that will help us start to reestablish leverage in the first half. Right, and just on that, those initiatives, which you said AUD 6 million-AUD 8 million, which you get the full benefit this year. On the second round, the second round of program, any numbers you can point to over the next three years as to what you're targeting in terms of cost out? No. Look, we're still working on those, and I'd like to wait until November to give everyone a bit more color on that. The main, you know, reason for talking about it today is that it has to be a feature of our strategy and our plan going forward. And we're not backing away from it, but we'll sort of talk about more specifics as we get to the next six months. Just my final question, just on your U.S. Nude Lucy website. You've tried Stylerunner in the past to enter the U.S. through online, and you found it challenging on the fulfillment side in terms of cost. What's changed since then? Therefore, what gives you confidence that this will be more of a profitable outcome? Also, can you talk about opportunities in wholesale? Well, as we called out, Sam, it's a test. There hasn't been a huge investment there. But early days, the signs are positive. We've had a really good start with particularly signing up customers to the database. We haven't got any product in the market yet, and we're already transacting. At the moment, we've done a lot of work in finding a 3 PL for returns and all the back-end functions that need to happen. But we've also had some success, which we're pleased with, in terms of wholesale. And we've really gone into what we call boutiques, really to start showcasing the brand. You know, it's just too early to make any assumption on whether it's gonna be right or not. There are others in the same sort of space that are from Australia that have gone over there, and it seems to be that you just gotta stick at it, and get some recognition, and then you're off, so we're quite committed to it, but obviously we have a couple of numbers in mind that we're using internally. It simply reads as, "What does good look like?" If we hit those numbers, we'll certainly be investing further. Okay. Thank you. Thanks for your time. Thanks, Sam. Our next question comes from Mark Wade. Mark, please go ahead and ask your question. Yeah, guys, thank you. A continuation on Nude Lucy. I mean, what's. How has it been able to stand out in the Aussie market, which is crowded enough? And that's the nub of the question. Mark, well, that's a great question. That's what we look for every day, is what's gonna attract the all-important customer to us? And I just think, I believe our product's great. It's bang on trend. We've got a terrific design team there. And I think, you know, if you were to ask some women who shop with us, it's almost like you pick up a great looking garment, and then you get a bit of a surprise. It's well-priced. That allows us to potentially, down the line, review all that. But right now, we're sticking to delivering great product. I think our store fit outs also say something about what our customers feel comfortable within, and indeed, we're elevating those. Apart from that, I think also our marketing has been absolutely bang on, where that trend sits. If you look at most of our product, it's very flattering on almost all women. And I think that plays into it as well, and we're continuing to expand on that. We've got a great basics program, which is building very, very nicely. And now that we've got, you know, 36 stores and at least, you know, another five or six coming, that's gonna give us further leverage to do even better there. Not just from a margin point of view, but also product development point of view. I can also call out that in November, we're elevating a little bit further with a brand called Nils, N-I-L-S. It's 100% owned by us, and it'll start to appear in the Nude Lucy stores, and that's gonna hopefully allow us to get a higher average sale moving forward. So we're obviously very positive about Nude Lucy. And if you look at some of the new stores, you'll start to see the innovation that's coming through from the fit out lens as well. I think, good on you. I mean, I guess, sounds like it's a... could be a real success story, and you know, to be able to virtually start it from the ground zero. I know it came with Glue, but you know, to grow that I think that's a real- ... Real achievement, so well done. Thank you. Turning to the last one on the TAF buyback, you've picked up two more stores in the second half. There's 60 to go over the next four or so years. What's been the reaction from the franchisees? How have you managed that? Any potential negative fallout I was initially concerned about? It seems like it's okay, and just remind us of the timeline for the remainder. So how's that TAF buyback going? It's been pretty good, Mark. I mean, we're not pushing anywhere, but where a franchisee wants to sell, we're having those convos. Obviously, as leases expire and stuff, you know, we're still doing the absolute right thing with renewal of leases and so on, and achieving some great outcomes, and then refitting those stores, as are the franchisees that were in midway through the cycle. The positive news for us is where we are picking up the stores and putting particularly our vertical products through it, we're seeing margin growth and indeed comp growth. So we're very, very excited. I'm not sure in that we've just picked up Camberwell a month ago. Is that in our numbers here, Matt? No, it's not in the numbers. No. Okay, so it's an ongoing thing, Mark. Mm-hmm ... that we're working with, but the one I'm delighted about the most is, you know, a store that's miles away from us in Cairns. We've bought that store, and it's been very positive indeed. So, I think that there's some great upside for us coming down the line. Okay, great. All the best. Thanks, Mark. Our next question comes from Garth Francis. Garth, please go ahead and ask your question. Good day, Matt and Dan. Thanks for taking questions. Just one quickly on CapEx. Could you just give us a sense of where you feel CapEx is gonna lie, especially with the TAF acquisitions? And just landlord contributions, again, seem to be at a similar rate as they were. Is that something that you'll continue to receive? Yeah, I might break that into two parts. So if I think about, I'm gonna call it the CapEx for new stores, refurbishments, and just general maintenance CapEx, you could expect to see that roll forward at similar levels to where it's been. It'll go up and down slightly, you know, depending on the number of new stores that get opened in a given year. So certainly the landlord contributions we're getting to new stores are still strong. And you know, that's allowing us to open a lot of new stores, which is terrific. In terms of the, I'll call it the CapEx for acquisition of the Athlete's Foot stores, that will occur over five years. It was small in respect of the year we just had. However, it will ramp up, in particular in 2025, 2026, and 2027. I've I've seen some estimates of what people think, you know, ranges of what people think we might need to spend to acquire all of those. And yeah, there's a component of that that's you know, reacquired rights from the franchisees, and a component that'll be working capital for inventory. But the overall investment range that people have sort of called out is somewhere between sort of AUD 88 million to AUD 100 million that we'll invest over the next five years across those components. Yeah. Terrific. Thanks. And then, just on gross margin, kind of off the impairment aspect of it, were there any other, like, a freight impact for the second half that reverses out in the first half? Or are you, how well contracted are you, and does that become a headwind going into 2025? No doubt, freight costs are increasing in terms of international freight, and you know, I've previously said that, you know, that's something we have to manage within the mix of currency and freight. Look, I'm not seeing it as a massive headwind in the first half, to be honest. You know, we've got to continue to do a lot of work, you know, on margin where the currency is sitting mid-sixties, and you know, we've done a lot of that work already. I think it's, you know, it's there or thereabouts. Great. And maybe just on Glue, if I may. The stores, you do have the transition element aspect that I understand, but the stores that you're retaining, can you give a sense are they on a four walls basis, are they in line or below group in terms of profitability? I'd say they were in line in terms of profitability. Otherwise, we'd have to consider whether, you know, whether we close those as well. So in terms of making the decision about the stores that closed and the stores that remain open, we looked on the return on investment of those stores. So I think you could think of them as in line with the group profitability. Great. Thank you. Our next question comes from Benjamin Jones. Benjamin, please go ahead and ask your question. Morning, guys. Can you hear me okay? Yeah, thanks, Ben. Great. Quick question on your wholesale accounts, wondering what you're seeing in terms of the conversations you're having with those wholesale accounts, and if there's anything in particular you wanna call out in terms of the mix of maybe brand interest or account sizes that's driven that performance this year? Yeah, I think the way I'd talk about that is the customers you know are wanting to get their hands on Hoka. We could be selling a lot more Hoka into the market right now to a lot more customers. However, we're you know we're being considered in our approach to that. Similarly with UGG, there's lots of customer interest and lots of customers wanting to buy UGG at the moment. So you know in the brands that we've had for some time, we've called out the sort of the challenge in Vans, and that's a global challenge that they've got. So that's impacting it. It's a little bit driven by the fashion and the style in there. You know, it feels like some of our wholesale accounts are doing a little tougher than we are in our retail business as well. So, you know, we called out that, you know, there's a retail mix going on as we roll out new stores. So, they're the sorts of dimensions to think about there, Ben. You know, the positive thing is that, you know, in the first seven weeks, we've seen sort of a shift back to positive growth in there. You know, Hoka's going very strongly. UGG's going very strongly. Skechers is going very strongly. So, you know, so it's, that's good. Yeah, it goes. Sounds like fairly consistent themes there. I'm just thinking on your distributor brand portfolio. I know, note your comments around the exit of CAT. Just talk to how you're thinking about any further additions to that portfolio or any maybe potential exits that may be down the track. In terms of potential exits, we will only exit something if we can't see it really adding value to particularly our banners, and selling those items through our banners, but for obvious reasons, you know, margin and exclusivities and all those sorts of things. In terms of new brands, I mean, we've got a we're talking to a dozen at any one time, some in apparel and many in footwear. And I look at it, this is just, you know, what's the hot new brand, and can we do a deal for five to 10 years with that brand? And will it be hot for all of those years? And most importantly, will it sell through our banners? That's the theme. As Matt called out earlier, in terms of CAT, it, it's just not a brand that, you know, would sell through Platypus or indeed Hype or Stylerunner or any of those banners. So therefore, it was best to move on and put those efforts and that rep force onto another brand. Got it. Makes sense. Thanks for the questions, guys. Good job. Thanks. Thanks, Ben. Our next question comes from Cade Madigan. Please go ahead and ask your question, Cade. Morning, Daniel and Matthew. Can you hear me okay? Yeah. Yeah, all good. Thanks, Cade. Excellent. Thanks. So I just wanted to ask a follow-up on the trading update, specifically on the like-for-like sales growth. So it seems that in the early trading into 2025, sales growth momentum has slowed from 2H 2024. In particular, what I would guess is the exit run rate of 2H 2024, despite, as I think you may have put it, the uninspiring base. Is there anything there you'd call out in terms of trends, like, generally speaking, for the consumer? And is that sort of like? Do you expect that sort of momentum to continue into FY 2025, or is there something else going on there? So, couple of things to think about there, Cade. We call that that was a, you know, pretty aggressive promotional environment in May and June, and certainly the comps we were cycling the base were lower than the comps that we started to cycle in the first seven weeks. So I'm really not reading anything into the consumer other than it, you know, the consumer strengthened in April, May, and June. And we feel as though what we've seen in the first seven weeks is a continuation of that. And, you know, so that's been a four-month sort of trend shift, which, you know, I don't usually call a trend shift until I've seen a quarter. But I think we're seeing that. So, you know, again, not predicting the future, we've got every confidence that that strength, you know, can continue over the next, you know, the next six to 12 months from what we're seeing right now today. Hopefully that answers. I don't really see it as a weakening, if that makes sense. Very much, you know, a continuation of that improved trend. Okay, no worries. That's very helpful. Thank you. Yeah. Our next question comes from Wei- Weng Chen. Please go ahead and ask your question. Are you there, Wei- Weng? While we wait for Wei- Weng, we can move to Ed Woodgate. Ed, if you'd like to go ahead and introduce yourself. Oh, sorry. Sorry, I'm here. Oh, you've got you. No problem. Yeah, I didn't realize I had to press mute. Sorry, my bad. My question was very similar- Hello, how are you? Hey, good, thanks. My question was very similar to the last one, just in terms of, you know, Accent, haven't been alone in seeing improving trends. So I guess, what's your sense of what's driving this, next wave of kind of consumer resilience? And then within the strengthening consumer, are there any sort of demographic trends that you'd maybe point to? Look, the way I characterize it is, and we've called out a few times over the last sort of six months that at the top end, it feels like it's going really well, and nothing's really changed there. So, you know, we call out, you know, the strength of Hoka, the strength of performance running in the Athlete's Foot, you know, and that's all at price points over AUD 200, and that keeps going very well. Yeah, Skechers has just gone from strength to strength, and continues to be strong, as it is globally. Their product pipeline's outstanding, and the sort of more challenging area has been in our sort of call it youth consumer space. Sorry, I should add that Hype's been going very well, and continues to at the higher price point end. So yeah, I think what we've seen is that the youth consumer is coming out a little stronger. And some of that's the product offer that we're putting in front of them, which we've evolved. And some of it's, it feels like, you know, we're perhaps through the worst of, you know, the sort of spend that they were able to do. So it feels like that may be strengthened a little bit with tax cuts and other things. But, so hopefully, that gives you some color, that top end's remained very strong, Skechers has remained strong, and that the areas that were a bit more challenging have got a little better. Yeah. No, thanks for that. And then just a quick one on Trybe. Are you still gonna, like, sell into Trybe or distribute into Trybe? Yeah. Yes, we are. Indeed, every brand that Trybe will want to continue, that we distribute will be supplied in there. I can also call out that we will also be selling kids' footwear within all of our banners, so there's nothing to stop us doing that at the same time, but Trybe, yes, in particular, Skechers is very strong in that banner. Yeah. No, thanks for that. Our next question comes from Ed Woodgate. Ed, please go ahead and unmute yourself to ask your question. Oh, hi, Dan, Matt. Thanks for taking the follow-up. Just wanted to get a little bit more color on, on GPs. Has the promotional environment continued into July and in the second half? Can you call out any, like, the specific number, a dollar number, what FX, what's the impact, how FX impacted the second half GPs, please? I think it's hard to call out a specific number. What we've talked about is that, you know, through that period, we'd planned for a sort of 64-65 FX rate, and for the full year, we achieved about 67. So, you know, it was slightly better than what we'd planned for. But still sort of, you know, still behind last year in terms of the aggregate rate achieved. So, what we have said is that, you know, every one cent of movement in exchange rate to the positive, across the course of 12 months, all else being equal, is worth about AUD 5 million of EBIT. So, you know, hopefully, that gives you a little bit of a sense. But it's difficult to talk about specifics, 'cause there's freight in there and all sorts of other things that we have to deal with. Okay, thanks. Sorry, just a quick question on marketing. So that looks like it's been very well managed, down a 100 basis points, just percentage of sales in the second half year-on-year. Sounds like that's been partly due to the ongoing strength of the loyalty program, but is there any other factors or anything you'd like to call out there? And do you think those savings are sustainable? Yes, I do. So, you know, we've been doing a lot of work, as we've talked about, with our spend on performance marketing and, you know, also, you know, looking at efficiencies in other areas of marketing. For example, we spend a lot of money on, I'm gonna call it, signage for stores. And, you know, as we've been refurbishing stores, we've also been retrofitting screens into those stores. So we're getting efficiency in the spend that we have to make on, I'm gonna call it, paper and plastic signage for those stores, which is also, you know, hopefully good for the environment, albeit there's electricity we use in the signs. So that theme will continue. In the Athlete's Foot, there's a little bit of reclassification of marketing and cost because of the transition of the franchises, but that's a smaller component of it. Okay. Thanks, guys. Yeah, I think very good result considering the environment. Yeah, I'll let you go. Appreciate that. Thanks, Ed. Now, we've got one final question from Peter Richards. Peter, please go ahead and ask your question. Hi, Daniel and Matt. Just a question with the Trybe announcement you just made. Is there gonna be any impairments coming through from that, or is it fairly minor? Yeah, no impairment whatsoever, Peter. So, we were able to sell that for book value. So, no financial impact at all in respect to that of that divestment. Okay. Thanks very much, and good result. Thanks. Thanks, Peter. And one last question from Sam Haddad. Sam, please go ahead and ask your question. Yeah. Thank you. Just to clarify, on the FX cents, outlook, so AUD 0.67 is now the neutral baseline for FY 2024, and therefore a tailwind would only be if the FX is above AUD 0.67 in 2025? Is that the right way to read that? I think that's a good way to think about it, Sam. So, you know, we talked about for this year, we'd planned again for AUD 0.65. If we can achieve around AUD 0.67, then, you know, we'll end up booking about the same amount of profit in relation to currencies we did last year. So I think that's a reasonable way to think about it. So the current spot rate is neutral rather than a tailwind. I thought the, Yep. AUD 0.64 was the original base, but now we're looking at AUD 0.67 as a starting point. Yep. You've gotta, you've gotta think about what we've planned for, and then what actually eventuates. Because, you know, if we plan for AUD 0.64 and, and we get AUD 0.67, as we did last year, we bank an extra three cents into the, into the profit margin. So, you know, those sorts of, those sorts of characteristics have to, have to maintain, if that makes sense. Thank you. Thank you. That brings our Q&A session to a close. Daniel, I'll hand back to you for closing remarks. Well, I just wanted to thank you to you all, and we're out there doing what we do best, and we'll talk again in November. Thank you very much for your time. Thanks, guys.