LOV Delivers Strong Earnings Performance Backed by Global Store Expansion

Lovisa Holdings Limited delivered another strong half-year result, highlighting the success of its global expansion strategy supported by strong growth and disciplined capital allocation.

Lovisa Holdings Limited (ASX: LOV)

Lovisa Holdings Limited (ASX: LOV) is one of the successful global retail companies, focused on fashion, jewellery and accessories. The current market capitalisation of LOV is $2.42B, with a partially franked dividend yield of 3.66%.
Strong store growth

The company currently operates in more than 1000 stores across 50+ markets globally, out of which 85+ new stores were added in the first half of FY26, continuing the strong expansion during the period following a strong second half of FY25, where the company added 152 more stores.

Half yearly result FY26 

LOV announced its first-half results for FY26 on 19 Feb 2026, stating that revenue increased by 23.3% compared to the previous half to $500.7M and comparable store sales are up 2.2%. LOV reported an underlying sales growth of 22.8% to $498.1M, supported by strong momentum in Europe and America, in which European sales are up 39.4% and USA sales are up 37.6%; on the contrary, Australia/NZ sales are down by 4.9%. The company highlighted that the APAC market remains an opportunity for improved retail execution with recent senior hires in the region to drive performance.

LOV reported a gross profit of $411.6M and an underlying gross profit of $412.9M, up 23.4%, with the underlying gross margin of 82.9% up 50 bps. The company's gross margin growth is up 170 bps compared to HY25 and 220 bps higher than that of HY24. This expansion is the result of the company focusing on supplier cost prices, promotions and shrinkage.

The company has delivered strong earnings performance, with EBIT up 8.9% to $89.3M, reflecting 20.4% growth from Lovisa Stores. The underlying EBIT rose by 20.4% to $109.1M. LOV reported an NPAT of 58.4, with an underlying NPAT of $69.6M, up 21.5%, highlighting strong performance from Lovisa stores. The company currently has higher depreciation and lease interest expense due to continuous growth in the store network.

LOV has reported a strong cash generation for the first half of FY26, with cash flow from operating activities up 30.3% to $183.8M, with working capital continuing to be well managed. The company has done a capital expenditure of $31.7M, which was used in building a new store and for maintenance. The company has reported a net cash flow of $28.9M and a closing cash balance of $70.47M.

The company’s balance sheet for the first half of FY26 remained strong, providing the financial strength to continue its global expansion strategy. The inventory holdings increased to $86.8M, which is in line with revenue growth and having a clean stock position at the end of the year. The company’s total assets reached $737M, with net cash of $12M for the period. The company’s debt facilities were extended for a further 3 years during the period, with committed cash term debt facilities of $120M available to support the ongoing growth. The company also announced an interim dividend of 53 cents per share, reflecting cash flow generation and a strong balance sheet.

Conclusion

LOV continues to position itself as a high-quality global retailer, supported by strong earnings growth, stable margins and a healthy balance sheet. As the company continues with the same growth momentum and operational execution, the company appears to be well positioned to deliver long-term growth.

(Source: Company Announcements)