$LOV have issued their trading update ahead of today's AGM.

• Global comparable store sales for the first 20 weeks of FY25 were up 1.0% on FY24 for the year to date
• Total sales for this period up 10% on FY24, benefiting from continued growth in the store network over the past year.
• 27 net new stores opened for the financial year to date, including 40 new stores opened and 13 closures (including 2 related to the conversion of our UAE franchise business to company owned and 2 relocations).
• This has taken the store network to 927 stores across 49 markets, with three new franchise markets opened for the year to date in Ivory Coast, Republic of Congo and Panama.
• Compared to this time last year we are currently trading from 91 more stores in 9 additional markets.

My Assessment

LFL is a bit soft, from my perspective - looking at the wider retail sector growth in the large ex-Australia markets of USA, SA, UK, Fr, Ger., and Malaysia. Given that most of these markets still have some inflation, a 1.0% LFL to me would indicate declining volumes.

So the sales growth is largely driven by 11% net new stores.

If I am reading market consensus correctly, then the market expects FY25 to deliver EPS growth of 27%. Presumably, $LOV have continued to see their costs increase, so I don't see how they'll get anywhere near consensus, unless the have a blow-away peak November-December season.

That said, the SP is already 11% below consensus. Maybe, on these numbers, there is further to fall? I guess we'll find out.

Disc: Not held