Lovisa Holdings reported FY26 revenue growth of 17.6% to $938.8 million, driven by aggressive international expansion that saw the Americas surge 29.6% and Europe climb 29.5% year-on-year. The jewellery retailer added 160 stores during the period to reach 1,136 locations globally, with the bulk of this growth concentrated in offshore markets. While the headline numbers are strong, the composition of earnings growth reveals a business in transition, with international operations offsetting softness in the core Australian and New Zealand market, which contracted 5.7%.
Profitability metrics paint a picture of operational leverage. Gross margin expanded 60 basis points to 82.6%, building on recent years of improvement and reflecting the company’s progress in product sourcing and retail execution. Despite ongoing investment in technology, supply chain infrastructure, and the Jewells 7 store trial in the UK, EBIT climbed 14.1% to $158.2 million while net profit after tax rose 10.7% to $95.6 million. The more moderate profit growth relative to revenue expansion suggests the company is trading near-term margin gains for market share and infrastructure investment to support the expanded store base, a trade-off that appears justified by the scale of international opportunity.
Comparable store sales for the full year increased 2.0%, a modest outcome that reflects the challenging conditions in Australia and New Zealand offsetting stronger trading in newer markets. The trajectory improved markedly in the first eight weeks of FY27, with global comparable sales accelerating to 3.0%, suggesting demand for the company’s products remains intact and that the momentum in international markets is building. The question for investors centres on whether the domestic market has simply cycled into a trough or faces structural challenges, and how quickly newly opened stores in Europe and the Americas will move toward normalised productivity levels.
Cash generation remained robust, with operating cash flow up 21.0% to $294.5 million, demonstrating the business is fully self-funding its expansion program. The board rewarded shareholders with a final dividend of 33 cents, bringing full-year distributions to 86 cents and representing 100% payout of net profit. This 11.7% increase in dividends combined with growth in earnings per share to 86.3 cents signals management confidence in the sustainability of current cash flows, though the payout ratio leaves limited room for unforeseen pressures.
The near-term focus should centre on whether the accelerating comparable sales momentum in early FY27 is a genuine inflection point and whether the domestic market begins to stabilise. Investors should also monitor the productivity of recently opened stores in key growth markets and track management commentary on the pace of international expansion. This announcement is price sensitive and has been flagged as material by the ASX.
View the full ASX announcement (PDF)
About Lovisa Holdings Limited (ASX: LOV)
Lovisa is an Australian fashion jewelry and accessories retailer that operates stores across Australia, New Zealand, and international markets. The company specializes in trend-driven jewelry, fashion accessories, and related products sold primarily through its own retail stores. Lovisa is known for its fashion-forward, affordable jewelry offerings targeting young women.
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