The Lovisa Holdings Ltd (ASX: LOV) share price is soaring today.
This morning, the jeweller released its latest half-year earnings for 1H FY22. It reported higher revenues and increased its dividend payment by 85% compared to 1H FY21.
At the time of writing, the Lovisa share price is up 20.54% at $19.95.
Let's take a deeper look…
What did Lovisa report?
For the FY22 half-year (ending 26 December 2021), Lovisa highlighted the following financials:
- Revenue up 48.3% to $217.8 million compared to the prior corresponding period (pcp)
- (Statutory) net profit after tax (NPAT) up 70.3% to $36.1 million
- Gross profit up 50.5% to $170.7 million
- (Statutory) earnings before interest, taxes, depreciation and amortisation (EBITDA) up 46.2% to $81.7 million
- Earnings per share (EPS) up 70.3% to 33.7 cents
- Upcoming dividend increased by 17 cents to 37 cents.
At its core, Lovisa aims to bring "brilliantly affordable fashion jewellery to the world". As such, it continued with its "global rollout strategy" during the half, opening 42 new stores. In total, Lovisa now has 589 stores, with 73% located outside of Australia.
What else did Lovisa report?
The jeweller did experience COVID-19 disruptions and challenges during the period. This included temporary store closures in Victoria and New South Wales, as well as in New Zealand and Malaysia.
All in all, this contributed to "overall trading days lost higher than in prior year", shipping difficulties, and heightened costs of doing business (CODB) — up 51.8% to sales.
The jeweller said it used this time for "continued investment in team structure to support building the platform for future growth".
Lovisa sales were up against the pcp. Global sales were up 21.5%, online sales were up 36%, and total sales hit an almost 50% increase, reflecting "strong comps and growth", the jeweller said.
It held a cash position of $52.7 million at the end of the period with no debt.
Finally, it declared an interim dividend (30% franked) of 37 cents to be paid to shareholders on 21 April.
What did management say?
Lovisa also transitioned to new leadership during the period, with Victor Herrero taking the reins as CEO.
Herrero said:
I'm thrilled to take over running the Lovisa business in such a strong position and we are very pleased with the performance for the first half despite the ongoing challenges and disruptions we face globally from COVID.
The team have performed very well through this period and have the business well positioned for the next phase of growth, with the strength of our balance sheet putting us in a great position to take advantage of future opportunities as they arise.
Lovisa share price snapshot
The Lovisa share price is down 0.15% this year to date. To compare, the wider S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) has dropped 15%.
Earlier this month, the team at Macquarie pitched Lovisa as a buy due to its "bold expansion plans".
The company has a market capitalisation of $1.77 billion.
