Lovisa shares shed 5% as sales growth slows
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More news: Lovisa shares tumbled in morning trade after the jewellery retailed missed estimates for the six months to December.
Lovisa shares were down 5% to $27.84 at midday AEDT.
RBC Capital Markets analyst Wei-Weng Chen called the first-half result "slightly soft" with sales growth behind consensus forecasts.
Like-for-like (LFL) sales growth of 0.1% for the first half fell short of average estimates of 0.7%, and marked a slowdown from 1% after the first 20 weeks of the period.
Citi analysts said the downturn may increase concerns around the impact from Lovisa's new competitor Harli + Harpa.
However, they flagged that LFL sales for the first 7 weeks of the second half was 3.7% growth compared to average forecasts of 2%.
What they said: "We think the market will be pleased to see the rollout and LFL sales growth accelerating again in 2H25," Citi's analysts said.
"However, further certainty may be needed around the strategic direction of the business with this year’s pending CEO change."
Lovisa reports 6.5% profit jump but misses estimates
The news: Discount jewellery retailer Lovisa posted a lower-than-expected 6.5% rise in first-half net profit to $56.9 million, as inflation weighed on its bottom line and an increasing number of stores in higher-cost markets impacted earnings.
The Brett Blundy-backed retailer declared a 50 cent per share interim dividend, in line with a year ago.
The numbers: Net profit growth was expected at 15% to $61.5 million, according to Visible Alpha data. Sales revenue, which analysts expected to grow 11% to $414 million, rose 8.8% to $405.9 million.
The retailer's gross margin climbed 170 basis points to 82.4%, topping its 40-basis-point improvement in the prior corresponding period.
The context: Lovisa said it has continued to invest in team structures and technology to support international growth. It noted that increased spend on digital marketing and events — combined with inflationary pressures and an increased mix of stores in higher cost markets — resulted in higher cost of doing business for the period.
This has included 25 new stores in Europe and 11 new stores in the Americas during the first half of the fiscal year. Lovisa's total store count is now at 956 and it plans to open in its 50th market this week with its first store in Zambia.
The source: ASX release
