Lovisa (LOV) H1 2025 earnings summary

Executive summary

• Revenue increased 8.8% year-over-year to $405.9m for 1H FY25, driven by global store network expansion and 57 new stores opened, offset by 14 closures/relocations.

• Net profit after tax rose 6.5% to $56.9m, with EBIT up 10.7% to $90.2m compared to 1H FY24.

• Gross margin improved by 170bps to 82.4%, reflecting strong pricing, inventory management, and margin discipline.

• Interim dividend of 50.0 cents per share (unfranked) declared, payable 10 April 2025.

• Store network reached 943 across 49 markets at half-year end, with Europe and Americas leading new store growth.

Financial highlights

• Revenue reached $405.9m, up 8.8% year-over-year; gross profit grew 11.1% to $334.7m at an 82.4% margin.

• Operating cash flow was $141.1m; net cash at period end stood at $6.7m.

• Capital expenditure totaled $17.1m–$19.8m, mainly for new store fit-outs and refurbishments.

• EPS rose to 51.61 cents, up from 49.08 cents year-over-year.

• Inventory increased 14% year-over-year, slightly above store network growth.

Outlook and guidance

• First 7 weeks of 2H FY25 saw comparable store sales up 3.7% and total sales up 12.9% year-over-year.

• Store rollout momentum expected to continue, with 16 new stores opened since period end and entry into the 50th market imminent.

• Management expects to open more stores in FY25 than in FY24, with ongoing investment in support teams, logistics, and technology.

• Economic conditions remain soft in several markets, with inflation and rising interest rates potentially impacting demand.