The Lovisa (ASX:LOV) share price is trading near record highs

The Lovisa (ASX:LOV) share price has been surging higher on expectations around the company’s global expansion strategy. Here’s the lowdown.
The post The Lovisa (ASX:LOV) share price is trading near record highs appeared first on The Motley Fool Australia. –

jewellery share price rise represented by lots of gold necklaces hanging in a row

A surprising success story to emerge out of the last 12 months has been Australian jewellery and accessories retailer Lovisa Holdings Ltd (ASX: LOV). After a dramatic fall during the market crash last March, the Lovisa share price has rallied strongly since and is now back above its pre-COVID price and trading around new all-time highs.

Let’s take a look at how the retailer has been performing.

What’s been driving the Lovisa share price?

Company background

Lovisa sells on-trend, but affordable, jewellery and accessories. The company aims to deliver a unique in-store shopping experience, with Lovisa stylists providing customers with personalised styling tips and advice. Since launching its first brick-and-mortar store back in 2010, the company has expanded internationally, and now has a presence in 15 countries.

Financial performance

Lovisa’s first-half FY21 results were pretty weak overall. Revenues were down 9.8% versus the first half of FY20 to $146.9 million, while net profit after tax plunged 22.6% to $21.5 million. Despite this, the Lovisa share price surged on the day its results were released.

The results were heavily impacted by COVID-19 lockdowns in various geographies. Strict lockdowns in Victoria hurt sales over the first quarter, but once those restrictions eased, Lovisa reported a strong rebound in foot traffic. However, this was offset by market headwinds in the United States and Europe due to the continuing effects of the pandemic.

A positive sign for investors is that Lovisa has continued with its global expansion plans throughout the pandemic. Lovisa added 25 new stores during the six months ending 31 December 2020, bringing its global total to 460 stores. Fourteen new stores were opened in the US, as well as four in France and four in Australia.

The company also agreed to the acquisition of the European stores of German wholesaler Beeline in November 2020. Lovisa plans to convert around 90 Beeline stores located in six new European markets to Lovisa branding by May 2021. This will give Lovisa a significant presence in Germany, Switzerland, the Netherlands, Belgium, Austria and Luxembourg.

Outlook for FY21

Continued uncertainty around the impacts the pandemic will have throughout the remainder of FY21 make it difficult for the company to commit to a firm earnings outlook. However, Lovisa does note that trading over the first seven weeks of the second half of FY21 has continued to rebound in the Southern Hemisphere.

Despite challenging conditions persisting in the Northern Hemisphere, comparable store sales were up 12% overall during those first seven weeks, suggesting the possibility of a strong rebound over the second half should those green shoots continue to sprout.

Other retailers performing well

The Lovisa share price isn’t the only ASX retail share soaring to new highs, as investors try to price in a possible economic rebound over the next few months. Plus-size women’s clothing retailer City Chic Collective Ltd (ASX: CCX) has also had a stellar run over the last few months, as has Premier Investments Limited (ASX: PMV), the owner of the Just Jeans, Peter Alexander and Jay Jays brands.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Rhys Brock has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post The Lovisa (ASX:LOV) share price is trading near record highs appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!