Lovisa shares tumble as Jarden expects tariffs to drive up prices
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The news: Lovisa shares tanked more than 10% before trimming some losses after Jarden downgraded the jewellery and accessories retailer due to the impact of tariff-related price increases.
The numbers: Lovisa shares were down 9.1% to $20.77 at 2pm AEDT, extending losses of around 13% since the "Liberation Day" tariffs were announced last week.
Jarden downgraded its rating on the stock from 'overweight' to 'neutral' and slashed its target price from $29.02 to $22.87.
Jarden's analysts noted that the new US tariffs include duties on Lovisa's key markets, including a 20% tariff on the European Union — home to 25% of the company's stores — and a 10% tariff on the UK, Australia and New Zealand, which together make up 28% of its stores.
The context: The analysts said it expects Lovisa to mitigate the majority of tariff-related gross profit margin pressure, through a combination of US and global price increases and supplier renegotiations.
However, they expect volumes to underperform relative to consensus expectations due to the impact of price increases, declining consumer sentiment, and decreasing global growth.
The source: Jarden research
