Lovisa Holdings Limited

ASX:LOV

Lovisa Holdings Limited

ASX:LOV
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$21.51 (-2.5%)
Last close price
#83
Rank
12
Held by
41
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Reports (7) My Report Forum Investors
Forum Topics LOV LOV 1H FY26

Pinned straw:
mikebrisy
Added a month ago

Global fast fashion jewellery retailer announced their results this morning.

ASX Announcement

Their Highlights (pcp comparisions)

• Total Revenue up 23.3% to $500.7m

• 1H FY26 comparable store sales up 2.2%

• Lovisa Underlying Gross Margin1 82.9%, up 50bps

• 85 new stores opened during the half year, 1,095 at half year end

• Reported EBIT $98.3m, NPAT $58.4m • Lovisa Underlying EBIT1 $109.1m up 20.4%

• Lovisa Underlying Net Profit After Tax1 up 21.5% to $69.6m

• Operating cash flow of $183.8m, up 30.3%

• Interim Dividend up 3 cents to 53 cents per share, 50% franked

• Solid start to the second half with first 7 weeks Total Sales up 21.5% and comparable store sales up 1.6% 


And I will add, because they seem to be avoiding it:

• Net Profit After Tax up 2.6% to $58.390m


My Assessment

I'm currently on the call, but clearly the market is reacting negatively to what appears to me to be a significant NPAT miss vs, consensus of $66.65 (consensus, marketscreener.com but n=2 only), or at the EBIT line $98.3 vs. $100.6m (n=4).

US and Europe have seen strong revenue growth, being the focus of store build out, which is progressing at a reasonable clip - particularly in North America. This part of the business is now becoming material, is performing well, and still has a long runway ahead.

What has made the presentation hard to digest is the insistence by management to present underlying numbers, given the UK trial to establish Jewells as a second brand,...trimming $10-11m (?) off the bottom line.

As far as I am concerned, store and brand innovation is what I expect management to be doing as an ongoing part of business. I don't like it being broken out and treated exceptionally.

I last exited $LOV in June 2024 at $32.75, and I currently have a valuation estimate of $30.00. Given this is a quality business, and having SP fallen now almost 38% from it all time high in 2025, I think I need to take a fresh look at it, particularly if the downtrend continues.

One concern I have is current management. They didn't sound particularly at ease on the call. And while I understand their desire to experiment with creating a second brand without a lot of scuitiny on it, I think breaking it out by focusing on underlying numbers looks like it has had the opposite effect - judging by some of the analyst questions.

I'm keen to hear the views of other StrawPeople holders (what say you, @Solvetheriddle and @Rick?)

Disc: Not Held, but taking a look again
Solvetheriddle
Added a month ago

@mikebrisy as always i look at the numbers and listen to the call before i look at the SP. i thought this was a booming result, stores well ahead GM up, the disclosure of Jewells clearly rattled the brokers. i thought i was listening to a funeral. The brokers have one job: get the number right, i think LOV is run like a private comapny and there was no "heads up" to the brokers that there was a $10m start up loss coming; they were humiliated. so be it. triggers the alogos as well as a "miss" --which i think is BS, so be it.

i will work through the numerbs OZ clearly weak, Europe, US looked great. will jewels work? i think we can give them the leeway to try something. at worst they write it off.

about to jump on HUB call will work on LOV later, i see no reason that the base thesis is undermined, the opposite really

25
rh8178
Added a month ago

Agree @Solvetheriddle it's a pretty good result. I hold IRL as well. But they are a bit secretive and whilst I have no issue with not giving "heads up" to brokers, the lack of transparency has always given me pause for thought when it extends to shareholders. God help us if there's ever a big problem. For what its worth I've listened to several of these over the years, and they are always a bit like this...

18
Solvetheriddle
Added a month ago

@rh8178 yes that's right, LOV always play their cards close to its chest, as a private company would, obviously, BB has a big stake and would be making a risk/reward assessment on any money spent. ATM, the way I look at Jewels is how much they put in idk $50m?, and it fails, ok that 2-3% of the market cap. so thats what we are dealing with. not disclosing all their plans, i can understand, well, I'd rather be secretive and successful than over promise and fall on their face. but brokers hate that stuff, they cant fill their spreadsheets

The rest was the usual mixed bag, but the positives outweighed the negatives, imo

18
Rick
Added a month ago

@mikebrisy @Solvetheriddle @rh8178Thanks for the updates. I’ll get to Lovisa shortly. We had a few reporting today, IPH, UNI, CDA and LOV. We’ve also been on the road on our way back from the Gold Coast after a bit of R&R. I’m keen to see how they have all fared.

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