Lovisa shares open lower as Citi downgrades retailer
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More news: Lovisa shares extended losses on the ASX after Citi downgraded its rating on the jewellery retailer on the back of slower-than-expected store rollouts and the emergence of new rival Harli + Harpa.
Lovisa shares fell 7% to $27.06 in early trading, having closed 3.8% lower on Friday.
Citi downgrades Lovisa on slow store roll-outs, competition
The news: Citi downgraded its rating on ASX-listed jewellery retailer Lovisa after flagging slower-than-expected store rollouts and competitive risk from new rival Harli + Harpa.
The numbers: Citi downgraded Lovisa from 'neutral' to 'sell' and cut its target price from $32.16 to $25.95. Lovisa last traded at $29.09 per share having gained more than 50% over the last 12 months.
The context: Citi's analysts said that the period of slower than expected roll-outs "appears to be continuing for longer than we thought", as the company refines its operating structures.
They also noted greater-than-expected competitive risk from Harli + Harper, a competitor founded by Lovisa's former chief executive Shane Fallscheer, which opened its first two stores last week.
Elsewhere, Citi warned of "elevated uncertainty" amid Lovisa's CEO transition, while its analysts are concerned that the company has relaxed its site selection criteria in certain overseas growth markets.
The source: Citi research
