Lovisa shares rally despite fourth strike on remuneration report
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More news: Lovisa shares rallied in afternoon trading as shareholders voted against the jewellery chain’s pay report for a fourth consecutive year.
Shares were up 2.6% to $27.52 by 2:30pm AEDT, having lowered earlier in the session.
73.68% of proxy votes went against the adoption of Lovisa's remuneration report. However, the resulting spill resolution was voted down by 87.85%, meaning there will not be a separate spill meeting.
Lovisa shares slip after underwhelming trading update
More news: Shares in Lovisa are down 2.5% to $26.15 after the jewellery retailer said an expanding global store footprint helped improve year-to-date sales by 10%, while comparable sales for the first 20 weeks of the current fiscal year were up just 1% on FY24.
RBC Capital Markets analyst Wei-Weng Chen said all three key metrics: comparable sales, total sales and net new stores — were below market expectations. The brokerage maintained its 'underperform' rating on the stock.
Analysts at Citi, which last week downgraded the stock to 'sell', also said the trading update was weaker than expected as like-for-like sales have slowed and the rollout appeared to be behind market expectations.
What they said: "While we acknowledge rollout can be lumpy, the 27 net new stores opened in the first 20 weeks appear to be tracking behind Visible Alpha Consensus expectations of 48 net new stores in 1H25," the analysts said in a note, warning that any more signs that the company is slowing its rollout may lead to a further PE de-rating.
Lovisa lifts sales on store network expansion
The news: Jewellery retailer Lovisa has announced a 10% improvement in year-to-date sales largely on the back of its expanding global store footprint.
The numbers: Total sales for the first 20 weeks of the current fiscal year were up 10% on FY24, benefiting from continued growth in the store network over the past year. However, global comparable store sales were up 1% on FY24.
It has opened 27 net new stores in the financial year to date, taking its store network to 927 stores across 49 markets.
The context: Lovisa chief executive Victor Herrero, who will leave the company in May next year, told shareholders ahead of the company’s annual general meeting that Lovisa has continued to maintain focus on expanding its global store footprint across all markets in which it operates.
Meanwhile, the company, which has been under fire from shareholders over excessive remuneration to Herrero, is likely to face another strike against its remuneration report at the AGM on Friday.
The sources: ASX announcement, ASX announcement
