Reporting season has (nearly) finished and there are plenty of ASX shares that could now be interesting investment opportunities after the recent share market volatility.
When a company releases a result, the market gets insight into how things are going, the short-term outlook and management's plans for future growth.
After some share price movements, these two ASX shares could be compelling:
Adairs Ltd (ASX: ADH)
Adairs is a leading retailer of homewares, furnishings and furniture. The company now runs three businesses after acquisitions – Adairs, Mocka and Focus on Furniture.
The Adairs share price has fallen 29% since the start of the 2022 calendar year.
It was difficult in the first six months for the company with store closures and COVID-19 impacting consumer confidence. Adairs said that these disruptions should not be recurring in the medium-term and the underlying business continues to perform well.
Total half-year sales, including $12.5 million from Focus, were down 0.5% year on year. Group online sales (excluding Focus) were up 8.2% to $97.6 million. The underlying earnings before interest and tax (EBIT) from the Adairs and Mocka businesses essentially halved year on year.
However, there were some non-financial positives achieved – Adairs' store floorspace rose 3.8% (and 8.6% in the last 12 months), Linen Lover membership is closing in on 1 million customers (up 10% in 12 months), it acquired Focus on Furniture and the national distribution centre (NDC) is operational.
Some plans of the ASX share to grow the profit include: upsizing stores, growing the store network, increasing online sales, becoming more efficient (helped by the new NDC) and increasing Mocka's presence in Australia.
Looking ahead, Commsec numbers suggest the Adairs share price is valued at under 7x FY24's estimated earnings with a FY24 grossed-up dividend yield of 15.4%.
Lovisa Holdings Ltd (ASX: LOV)
Lovisa is a rapidly growing jewellery business that is generally targeted at the younger end of the consumer world.
It already has a global presence with at least 10 stores in: Australia, New Zealand, Singapore, Malaysia, South Africa, the UK, France, Germany, Belgium the USA and the Middle East. It also has a small presence in a few other European countries. It opened 42 net new stores in the first six months of FY22.
The ASX share reported in its FY22 half-year result that demand and profitability came roaring back. Revenue rose 48.3%, earnings before interest and tax (EBIT) jumped 59% and net profit after tax (NPAT) rose 70.3% to $36.7 million.
Whilst the company was impacted by COVID, higher freight costs and logistics, it saw strong growth across most major markets as economic conditions improved. The company's online sales grew 36%, but it thinks it's only at the 'infancy' stage of its global online offering – it's investing to deliver growth here whilst ensuring it maintains profitability.
Total sales in the first eight weeks of the second half were up 61.7%.
The company is quickly adding to its store network. In the US it added 18 new stores and it's now trading from 19 US states. It has put in place a global leasing team to drive growth from existing and "new markets."
Looking at Commsec estimates, the Lovisa share price is valued at 26x FY24's estimated earnings with a projected partially franked dividend yield of 3%.
