The Lovisa Holdings Ltd (ASX: LOV) share price was a strong performer last week.
The fashion jewellery retailer's shares avoided the market selloff and recorded a 16.5% gain.
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Why did the Lovisa share price shoot higher?
Investors were bidding the Lovisa share price higher last week after the retailer reported a 48.3% increase in half year revenue to $217.8 million and a 70.3% jump in net profit after tax to $36.1 million.
This was driven by a 21.5% increase in same store sales and the opening of 42 new stores during the period. The latter brought the company's store network to a total of 589 stores.
Could Lovisa become a global force?
In response to its results, the team at Morgans retained its add rating and lifted its price target on the company's shares to $24.00.
Based on the current Lovisa share price of $19.86, this implies potential upside of 21% for investors over the next 12 months.
Morgans referred to Lovisa's same store sales growth as "remarkable" and suggested that under its new leadership, the company could be on course to becoming "a global force."
Commenting on the result, the broker said: "In our opinion, Lovisa's 1H22 result was nothing short of remarkable. +21.5% LFL sales growth, complemented by an accelerated store rollout and increased gross margins saw EBIT up 59%, 20% above our forecast."
Morgans was equally positive on the future and suspects the company could become one of Australia's most successful retailers.
It concluded: "LOV may just prove to be one of the biggest success stories in Australian retail. With ambitious (and financially well-incentivised) new leadership in place, we think now is the time LOV steps up to become a global force. Investment will be needed to expand LOV's network in the US and Europe and to take it into new markets, but the returns could be stellar."
