Lovisa (LOV) H1 2025 earnings summary

Executive summary

• Revenue for 1H FY2025 reached $405.9m, up 8.8% year-over-year, driven by global store network expansion and stable comparable store sales, with 57 new stores opened and 14 closed or relocated, bringing the total to 943 stores across 49 markets at half-year end.

• Net profit after tax rose 6.5% to $56.9m, with EBIT up 10.7% to $90.2m compared to the prior half year.

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

• Interim dividend of 50.0 cents per share declared, supported by strong cash flow and balance sheet, payable 10 April 2025.

• Opened first franchise stores in Ivory Coast, Republic of Congo, and Panama.

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.

• EBIT rose 10.7% to $90.2m; NPAT increased 6.5% to $56.9m; EPS rose to 51.6c from 49.1c year-over-year.

• Operating cash flow reached $141.1m; net cash at period end was $6.7m; capital expenditure was $17m–$19.8m, mainly for new stores.

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

• Return on equity (annualized) was approximately 54.6%.

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 (Zambia) imminent.

• Management expects to open more stores in FY2025 than in FY2024, 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.

• Focus on expanding both physical and digital store networks, supported by a strong balance sheet.