The Lovisa Holdings Ltd (ASX: LOV) share price is down 13% after the jewellery business reported its FY26 half-year result.
Lovisa is a global jewellery retailer with a presence in numerous markets across markets including Australia, the US, the UK, France, Germany, Canada, South Africa, Malaysia, Poland, Italy, the Netherlands and many more.
Lovisa FY26 first half result
Here are some of highlights from the report for the first six months of FY26, which excludes the Jewells business impact:
- Revenue grew 22.7% to $498.1 million
- Gross profit increased 23.4% to $412.9 million
- EBITDA (EBITDA increased) grew 24.4% to $175.9 million
- EBIT climbed 20.4% to $109.1 million
- Net profit after tax (NPAT) jumped 21.5% to $69.6 million
- Statutory net profit, including Jewells, grew 2.6% to $58.4 million
- The interim dividend per share was increased by 6% to $0.50
What happened?
While the company’s overall revenue performance was solid, there were mixed results across its different regions:
- ANZ revenue fell 4.9% to $109.5 million
- Asian revenue grew 0.1% to $19.3 million
- Africa and the Middle East revenue grew 17.3% to $36.6
- Europe revenue increased 39.4% to $191 million
- Americas revenue climbed 37.6% to $140.6 million.
It’s disappointing to see that Lovisa’s home market saw a decline, though the group did report “solid” comparable sales growth of 2.2% for the first half of the year, suggesting promising performance by the existing store network.
Lovisa reported that it opened 85 new stores during the half, with the business ending with 1,095 stores. It increased its net store count year on year by 146 Lovisa stores and 152 overall net new stores (including Jewells). The UK, USA and Canada saw the biggest year on year increases with a rise of 35, 28 and 18, respectively.
The ASX retail share said that it has continued to focus on “sourcing, promotion efficiency and shrinkage management”, which helped deliver the gross profit margin increase.
Its statutory net profit result includes a $10.8 million figure for the start-up phase of its potential second global brand, Jewells. Jewells had six stores in the UK at the end of the HY26 period.
Outlook for the Lovisa share price
The business continues to grow its core Lovisa business at a strong double-digit rate, which is a good sign. In the first seven weeks of the second half of FY26, total sales increased by 21.5% with comparable store sales growth of 1.6%.
Lovisa is also working on a store fitout upgrade globally which includes an enhanced ambience, high efficiency lighting, refined and elevated stainless steel finishes, a store-in-store piercing studio and digital screens integration.
Those changes could help further increase the growth potential of the business and make it a standout against competitors.
If the sales decline in ANZ is just a one-off, then I wouldn’t be too worried. But, shareholders will be hoping that’s not a long-term trend for established store networks. I’m hoping to see rising profit margins in the coming years thanks to operating leverage.
I think it’s still one of the ASX growth shares to watch, though the ANZ decline is not a particularly promising sign. Lovisa’s global store network continues to grow at a good pace to offset this, though.
