Full Year 2026 Lovisa Holdings Ltd Earnings Call Transcript
Key Points
- Lovisa Holdings Ltd (ASX:LOV) delivered strong total sales growth of 17.6%, driven by a 2% increase in comparable store sales and the opening of 160 new stores, bringing the total network to 1,136 stores.
- Gross margin improved by 60 basis points to 82.6%, reflecting continued focus on sourcing, promotional efficiency, and improved shrinkage, with 270 basis points of improvement since FY23.
- The company achieved robust profit growth, with EBIT up 14.1% to $158.2 million and NPAT up 10.7% to $95.6 million, supported by strong cash generation from operations of $294.5 million, up 21%.
- The Americas and European markets delivered close to 30% growth each, highlighting successful global expansion and a strong store rollout pipeline, with plans for a similar number of new store openings in FY27.
- Trading in the first eight weeks of FY27 showed total sales up 16.4% on a constant currency basis and comparable store sales up 3%, with improving momentum through August, indicating a solid start to the new financial year.
- The Board announced an increased final dividend of $0.33 per share, up 22% on the prior year, reflecting strong cash flow and a healthy balance sheet with significant liquidity for future growth.
- The company did not provide specific performance details for its new Jewels brand, which remains in a startup phase and is loss-making, with similar losses expected in the second half as in the first half.
- Store closures increased to 43 in FY26, with associated impairment losses and loss on sale of PP&E of about $8 million in the second half, reflecting ongoing network optimization.
- The ANZ region showed weaker performance, with average store revenue declining in the second half, though management emphasized a global perspective and natural hedging.
- The company faces potential tariff impacts in the US, with no net benefit in FY26 as tariffs paid in the first half were offset by refunds in the second half, and future impacts remain uncertain.
- Comparable store sales growth of 2% in FY26 was modest, and while the first eight weeks of FY27 showed 3% growth, this was against easier comparatives, with management noting the need to maintain momentum.
- The company did not provide specific details on the uplift from its new Series 5 store concept, and while it is rolling out, the financial impact remains undisclosed.
Thank you for standing by and welcome to the Lovisa Holdings Limited FY26 full-year results briefing. (Operator Instructions) And finally, I would like to advise all participants that this call is being recorded.
I'd now like to welcome John Cheston, Global CEO, to begin the presentation. John, over to you.
Many thanks, Paulie. Good morning, everyone, and thank you for taking the time to dial in today. On the call today, you have our Executive Deputy Chairman, Mark McInnes; our Group CFO, Chris Lauder; and myself, John Cheston, Global CEO. As you're aware, this morning we published our full year results to the ASX and we would like to talk you through them now. I'll do a page turn through the highlights of the presentation and we're happy to take questions at the end.
If we firstly turn to page 3, we will talk through some of the highlights of the year. I'm pleased today to present another strong result for FY '26.
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