Pinned straw:
$LOV issued a trading update for the first 20W of FY24 at the AGM this morning.
I've tracked this update (highlighted) against the recent updates it has issued, to show the anatomy of the slowdown it is facing. The trend is very clear.
Given that the last result probably includes something like 5-6% inflation, this indicates that same store volumes are down well over 10% from their peak.
With only 6 weeks trading to year end, the next 6 weeks are the peak retail period, so the 20 week update gives a good reference to see how well they fare through to year end.
In addtion, $LOV have open 55 new stores YTD and closed 20 for 35 net new stores (which includes the UAE franchise conversion to company owned, which is 12 store). Compared to a year ago, $LOV are currently trading in 160 more stores and 14 addtional markets, for a total of 836 stores. So network growth continues, albeit at a moderating pace to last year.
The market seems OK with the update, with SP up around 2% at time of writing.
I'm still looking increase my $LOV holding. The slowdown is continuing and it will be interesting to see how the business fares through the key November-December period. My view is that we might not yet have seen the bottom, so I will hold off with adding more.
Disc: Held in RL (2%) and SM
Karmast
Yes seems the update was inline with market expectations @mikebrisy
What was a bit more surprising was the size of the protest vote on CEO rem as below pulled from the AFR today. I was expecting a strike but this is a big one. And given the way Blundy has basically said thanks for the feedback but we aren't changing...they are much more likely to actually face a Board spill next year...
I am sure the CEO is great and works really hard etc. But let's say he was paid $10 million this year (still a hefty salary by listed retailer comparisons), it would have added $20 million to EBIT and probably around 12c or 20% to EPS for the year. In turn shareholders would most likely be sitting on a 10 to 20% increase from the current share price right now if that was the case. And if he didn't want the job for say $10 million is he really the right guy???
AFR article
Brett Blundy, the billionaire chairman of Lovisa, says he will not buckle to investor concerns over excessive remuneration, after shareholders voted against the jewellery chain’s pay report for a third year running.
Proxies showed that at this year’s in-person-only annual meeting 73.68 per cent were against the pay report, delivering the retailer another strike, and making it the largest no vote recorded. In 2021, 47.76 per cent proxies voted against the report. Last year, a board spill motion was called but voted down after the company received a second strike.
The pay report shows a staggering $30 million salary for its chief executive, Victor Herrero, a 13-year veteran of Spanish retail giant Inditex, the owner of Zara and Pull & Bear.
Lovisa CEO Victor Herrero
But Mr Blundy, who via his BB Retail Capital owns per 40 per cent of Lovisa, shrugged off the vote, saying the board has “the best intent for the best results and will continue to function that way”.