Accent Group said on Monday it had been ordered by the Australian Securities and Investments Commission to preserve communications and electronic devices for chief executive Daniel Agostinelli, director Michael Hapgood and another senior employee.
The company also said it expected to make $23 million to $28 million in half-year earnings before interest and tax, down from its February forecast of up to $35 million.
Accent blamed the downgrade on the war in Iran, which it noted had caused higher fuel prices and a significant deterioration in consumer confidence.
Both sales and gross margins had fallen since April, the company said.
In response, Accent planned a significant cost-cutting program, expected to deliver substantial savings in 2026/27.
The company said details of the program, which could involve store closures and layoffs, would be announced on May 13.
In February, Accent said it would shutter the 16 stores remaining in its Glue chain after less than five years of ownership.
RBC Capital Markets analyst Jackie Moody said Monday's update from the company was tough.
"Concerning to us is the fact that this only encapsulates weaker-than-expected trading conditions in a single quarter," she said.
Accent shares were down 12.9 per cent to 53.5 cents in late afternoon trading.
The ASIC investigation relates to trading in the company's shares between May 23 and June 10 in 2025, the company said.
Mr Agostinelli's 2Como trust sold a total of 800,712 shares on May 27 and May 28, for about $1.86 per share, or $1.49 million, documents show.
Just over two weeks later, Accent Group shares lost a quarter of their value.
They dropped from $1.81 to $1.36 on June 13 after the company announced trading conditions continued to be challenging, putting pressure on gross margins.
Accent Group said Mr Agostinelli's on-market share sales were pre-approved by the company's then-chairman David Gordon, who retired in November.
"Mr Agostinelli has the full support of the board in his ongoing role as CEO," the company said.
Mr Hapgood advised the board he did not trade Accent's securities during that time, it said.
"ASIC has stated that the section 33 notice should not be construed as an indication that a contravention of the law has occurred, nor should it be considered a reflection upon any person or entity," the company said.
An ASIC spokesperson said the agency was unable to comment while the matter was under investigation.
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