Lovisa Holdings Limited

ASX:LOV

Lovisa Holdings Limited

ASX:LOV
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$30.90 (-0.1%)
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#25
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23
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Reports (5) My Report Forum Investors
Forum Topics LOV LOV 1H24 Result

Pinned straw:
Rick
Added 2 months ago

I have a few companies reporting today. At a quick glance the Lovisa results look good, and ahead of FY24 analyst consensus. ROE, based on doubling 1H24 NPAT (ie. $107 million) and 1H24 equity reported ($104 million) is approx 100%. This assumes next half will be as good as 1H24. Does this look right Strawpeople?

I’ve been working on ROE of 90% for my valuation. I think the market will like it. I hope I haven’t made any huge errors here. I’ll have a more accurate look later.

Summary:

• Revenue up 18.2% to $373m with improving trend through Q2

• Comparable store sales down 4.4% on HY23

• Gross Margin 80.7%, up 40bps

• 74 new stores opened during the period, 854 at period end

• China and Vietnam markets opened during the half year

• EBIT $81.6m up 16.3%

• Net Profit After Tax up 12.0% to $53.5m

• Operating cash flow of $150m up 29.1% on prior period

• Net Cash of $15.5m at period end, with $120m of available cash facilities in place

• Interim Dividend of 50.0 cents per share, 30% franked

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UlladullaDave
2 months ago

That working capital position while rolling out stores and with declining SSS is impressive. LOV runs on the smell of an oily rag. Always has. That's the secret sauce. It's very hard to get in too much trouble when you can bag $300m in GP off $60m in inventory in a year let alone in 6 months.

24
Wini
2 months ago

@Rick I wouldn't double 1H NPAT for a retailer, they generally have massive skews to 1H profitability with November/December the biggest trading months.

26
Rick
2 months ago

Good point @Wini. will need to look at the normal skew and add in expected growth. Thanks

15
Solvetheriddle
2 months ago

@Rick last three halves note seasonality, the last number $24m is my est for sh24, probably will be coming down a touch

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Rick
2 months ago

@Solvetheriddle do you think this is a miss on consensus?

6
mikebrisy
2 months ago

From Tradingview.com the EPS H1 / H2 consensus split is 0.53 / 0.29, an amost 65:35 split, which is not unsual in discretionary retail, highly geared to the Nov/Dec season.

If Tradingview represents a reasonable consensus estimate (I can't see how many analysis are contributing the 1H forecast), then it meets consensus on revenue, and is a miss on EPS.

Also, interesting to see how the market reacts to the slowing in the rate of new store openings, with Capex of $14.3m down from $31.9m - there will no dobt be some Q&A on this on the call in an hour's time. This continues the trend from 2H23.

I agree with @Mujo in that the results look OK. I am waiting for SP weakness to increase my position.

For this most discretionary of categories to achieve LFL sales of -4.3% (volumes probably significantly lower, as they have pulled the pricing lever) as we near the trough of the retail cycle, to be continuing to expand the network, and then to still deliver a FCF of $83m by my quick calculation, is a splendid result IMHO.

18
Solvetheriddle
2 months ago

@Rick i don't really follow consensus but do my own figures, at this stage i would say, compared to my figures, better top line, better GM, but higher costs, interest and codb, may not be too bad as there is a significant new store drag i suspect. the roll-out speed is phenomenal

my numbers will come down due to lower per store profitability which is a new store drag that i can live with and lower SSS so a cyclical aspect, see what comes out of the briefing--still positive this story

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