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 expansion and 57 new stores opened, offset by 14 closures/relocations.

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

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

• Interim dividend of 50 cents per share declared, supported by strong cash generation and balance sheet, payable 10 April 2025.

• 3 new franchise markets launched: 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 up to 51.61 cents.

• Cash from operations before interest and tax was $141.1m; net cash at period end was $6.7m.

• Capital expenditure was $19.8m, mainly for new stores and refurbishments.

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

Outlook and guidance

• Trading in the first seven weeks of 2H FY25 saw comparable store sales up 3.7% and total sales up 12.9% year-over-year.

• 16 new stores opened since period end, with total store count at 956 and entry into the 50th market imminent.

• Management expects to open more stores in FY2025 than in FY2024, with continued investment in support teams, logistics, and technology.

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

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