Australian-born global jeweller Lovisa is preparing to launch into its 50th market globally as total sales surge by 12.9 per cent for the first seven weeks of 2025.
The jeweller confirmed it is set to open its first store in the African country of Zambia. This comes after opening 57 new stores during the first half of FY25, with 16 more stores open in the second half alongside two closures and one relocation, bringing Lovisa’s total store count to 956.
“Lovisa has once again been able to deliver solid sales and profit growth, with the highlight another outstanding gross margin performance, and the store rollout accelerating in Q2,” CEO Victor Herrero said.
“I want to again share my appreciation to the global Lovisa team for their hard work to be able to achieve these solid results.”
The United States is Lovisa’s largest market in terms of store count, up 209 by 2024 end, followed by Australia at 180, France at 88 and South Africa at 83. The retailer has stores across Asia, Europe and the Americas.
The 57 store openings in the first half included the opening of Lovisa’s first franchise stores in Ivory Coast, Republic of Congo and Panama.
Trading for the first seven weeks of the second half of FY25 saw comparable store sales for this period up 3.7 per cent.
This is up from just 0.1 per cent in comp sales for the first half of FY25, with total revenue for the first half up 8.8 per cent to $405.9
Gross profit was also up in the first half by 11.1 per cent, with gross margin up 170 basis points to 82.4 per cent.
“Investment has continued to be made into team structures and technology to support the growing global business and our focus on operational execution,” the group reported.
“This combined with increased spend on our digital marketing and events execution, inflationary pressures and increased mix of stores in higher cost markets, has resulted in higher cost of doing business for the period.
“This impact was offset by a reduction in CEO Long-Term Incentive expense from $6 million in the prior half year to $1.3 million in the current period.
Lovisa added that depreciation and interest expense both reflect the growth in the store network, with depreciation of store fit outs and lease right of use assets increasing in line with store numbers, and interest expense increasing due to the associated increase in lease liabilities.
The group’s effective tax rate was up on prior year at 29.3 per cent versus 26.4 per cent in the prior half year, with both periods reportedly impacted by the timing of recognition of tax losses in relation to emerging markets.
Lovisa’s cash from operations before interest and tax was $141.1 million, and net cash of $6.7 million at the end of 2024 year.
“Capital expenditure for the period was $17.1 million, predominantly from new store fit outs, up from $14.3 million in prior half year.
“Our continued strong balance sheet and cash flow position has enabled the board to announce an unfranked interim dividend of 50.0 cents,” Lovisa added. “The board will continue to assess dividend levels each half year and determine the appropriate level of dividend based on profitability, cash flows, and future growth capex requirements.
“The board do not currently have a specific dividend payout ratio and will continue to base dividends on the cash flow needs of the company and the structure of the balance sheet.”