The Lovisa (ASX:LOV) share price is flying higher today after the jewellery retailer reported its results for the first half of FY21.
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Lovisa Holdings Ltd (ASX: LOV) shares are off to a flying start this morning after the company released its half-year financial report earlier today. In the opening minutes of trade, the Lovisa share price has rocked 19.09% higher to $13.10.
How did Lovisa perform?
Earlier today, the jewellery and accessories retailer released its financial report for the first half of FY21.
The Lovisa share price is soaring despite the company reporting a 26.7% decline in profit after tax of $19.6 million. Lovisa also reported a 9.8% fall in revenue of $146.9 million for the half-year.
Lovisa noted that same store sales fell 4.5% for the half year, with gross margins at 77.2% compared to 78.9% 12 months ago.
The jewellery chain cited that the first quarter was heavily impacted by government responses to the COVID-19 pandemic. Lovisa highlighted temporary store closures in Victoria and weakness in global markets as contributing to the company’s poor performance.
Despite the dour financial results, Lovisa boasted a strong balance sheet for the half year with $42.5 million cash in hand. As a result, the company declared an interim dividend of 20 cents per share, up from 15 cents in the prior corresponding period.
What is the outlook for Lovisa?
Lovisa is a leading retailer in fashion jewellery, strategically targeting the affordable jewellery segment. The company currently boasts 460 stores in Australia and abroad, with notable locations in the United Kingdom, France and the United States.
The company did not provide an outlook or guidance for the full year. However, Lovisa’s management noted that the first seven weeks of the second half showed an improving sales trajectory. Lovisa highlighted a 12% increase in overall same store sales for the period.
The company also noted strength in Southern Hemisphere markets, whilst advising Northern Hemisphere stores faced challenging conditions.
In addition, Lovisa informed the market that its acquisition of the beeline retail business is expected to be completed in the coming months, accelerating the company’s European expansion.
Lovisa share price snapshot
Incorporating today’s gains, the Lovisa share price has now rallied 13% in year-to-date trading. Lovisa shares fell as low as $2.45 in March 2020 before surging more than 400% to their current levels.
Based on the current Lovisa share price, the company has a market capitalisation of around $1.2 billion.
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Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.