The Lovisa Holdings Ltd (ASX: LOV) share price is down 3% after giving a trading update for FY23.
It was actually up in early reaction – shares are down 6% from the day’s early high.
Lovisa shares its trading update
The affordable jewellery ASX share said that it wanted to tell investors how it’s going in advance of its annual general meeting (AGM).
Global comparable store sales for the first 19 weeks of FY23 “continued the strong trajectory” from the first seven weeks of the financial year and were up 16.1% on FY22 for the financial year to date. Total sales were up 60% compared to FY22. Growth is useful for the Lovisa share price.
Comparable store sales are being measured based on stores being open and able to trade. Stores that were temporarily closed due to COVID lockdowns in either year are not included in the calculation for that period.
Lovisa said that it continues to focus on expanding its store network, with 47 net new stores opened in the financial year to date, including 61 new stores opened and 14 closures.
The increase in store numbers takes the total store network to 676 stores across 26 countries. Four new markets have been opened in recent months, with Canada and Poland opened at the end of FY22. Since then, it has expanded into Namibia and Hong Kong.
Compared to 12 months ago, it’s trading in more than 100 more stores and in five additional markets. The first stores in Italy, Mexico and Hungary are also due to open in the coming weeks.
My thoughts on the Lovisa share price
The fact the business has managed to grow its comparable sales by the mid-teens is impressive in my opinion. I think it speaks to a promising future where the business can both grow its sales and increase its profit margins thanks to growing scale benefits.
While it’s not cheap for ASX retail share, I think it’s worth it considering the global growth potential seems very promising. It can significantly increase its store network size from here. It also pays a dividend, which is useful for total returns.
