The Lovisa Holdings Ltd (ASX: LOV) share price is sliding on Tuesday after the company posted its FY24 results.
Lovisa shares are currently trading at $31.066, more than 15% lower from the open today as investors process the company's annual figures.
Let's see what the company posted.
Lovisa share price tanks despite FY24 growth
The key highlights from the company's year include:
- Revenue increased by 17.1% year over year to $699 million
- Gross margin improved by 110 basis points to 81.0%
- Earnings before interest and tax (EBIT) rose 21.2% to $128.2 million
- Net profit was up 20.9% compared to FY24 and finished at $82.4 million
- Operating cash flow increased by 27.6% to $240 million
- Declared a final dividend of 37 cents per share, unfranked
What else happened in FY24?
FY24 was a significant year for the Lovisa share price. The company continued to expand its global footprint by opening 128 new stores, bringing the total to 900 stores across 46 markets.
Revenues of nearly $700 million were up 17% year over year, leading to a 110 basis point expansion in gross margin, hitting 81%.
This led to a 21% growth in net profit, with Lovisa generating 75.4 cents in earnings per share (EPS).
Lovisa also established a presence in several online marketplaces, such as Tmall, ASOS, and The Iconic, key to its "journey towards being an omni-channel retailer".
Additionally, the company opened a new 5,000 square metre warehouse in Columbus, Ohio, to support its growing business in the Americas.
It now serves over 200 stores in the Americas, whereas it closed another 14 franchise stores in the UAE and converted another three to "company owned" sites.
Aside from the above, Lovisa also closed another 14 stores from its global network.
With profits up double-digits this year, the Board declared a 37 cents per share final dividend. This could impact the Lovisa share price.
What did management say?
Lovisa's CEO, Victor Herrero, commented positively on the company's performance:
The company has once again delivered strong sales, gross margin and profit growth at the same time as investing in the structures to support our steady global expansion. This positions us well to continue our growth in both existing and new markets. I want to again share my appreciation of the entire global Lovisa team for their hard work and dedication to achieve these results.
What's next for Lovisa?
Looking ahead, Lovisa plans to continue its aggressive expansion strategy, focusing on opening new stores in existing and new markets.
The company opened 10 new stores in the first eight weeks of FY25, and further expansion is expected throughout the year.
This has already grown sales by 13% compared to this time last year. According to the release:
Trading for the first 8 weeks of FY25 saw comparable store sales for this period up 2.0% on the same time last year. Total sales for this period are 12.7% up on the same period in FY24.
Since the end of the financial year, we have opened 10 new stores with 2 closures, with the total store count at 908 including our first franchise stores recently opened in Ivory Coast and Republic of Congo, adding another 2 new markets to the network.
Lovisa share price snapshot
The Lovisa share price is sliding hard today after the company's FY24 results. In the last 12 months, the stock is up 73%.
