Lovisa Holdings Ltd (ASX: LOV) shares are a popular investment among ASX retail investors. Those interested in Lovisa may be wondering whether to invest ahead of earnings season.
Over the past 5 years, Lovisa has climbed 428%. However, the journey has been far from linear.
Lovisa has been a relatively volatile ASX retail stock. In particular, it has faced some challenges over the past year that have caused significant movements in its share price.
In August 2024, its share price hit a 52-week high of $38.29. However, by April 2025, it was trading significantly lower, reaching a 52-week low of $20.23.
Since then, it has rebounded once again. Yesterday, Lovisa shares closed at $33.42, representing a 65% increase since the 52-week low.
Given this volatility, potential Lovisa investors may be wondering what price to pay for the stock, and whether it's a buy ahead of earnings season.
Let's investigate.
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Lovisa's growth story
Lovisa is one of Australia's most successful retailers.
It is a fast-fashion jewellery retailer that has significantly expanded its store presence over the past five years. It operates across 49 countries. In May, it opened its 1,000th store.
While selling 'discretionary' products, the business model has proven resilient through various economic climates. It is not reliant on a specific fashion trend or particularly sensitive to economic conditions.
The business has also become significantly more geographically diversified in recent years.
Prior to COVID-19, approximately half of Lovisa's revenue came from its local Australian and New Zealand markets. Now, local markets make up around a quarter of the revenue following rapid international expansion. This provides an additional layer of diversification for shareholders.
In June, Lovisa gained a new Chief Executive Officer (CEO). Former Smiggle boss John Cheston stepped into the top job. This has been well received by the market, with Lovisa's share price rising since his arrival.
While former CEO Victor Herrero was considered a good operator, his pay package received substantial shareholder criticism. In 2022, his pay package reached $21 million, making him the second-highest paid ASX CEO, only behind Macquarie Group Ltd (ASX: MQG)'s Shemara Wikramanayake. In 2023, Herrero took home a staggering $29 million in base pay and share-based compensation.
Lovisa's current valuation
While Lovisa has an impressive growth story, that doesn't necessarily make it a good investment today.
The valuation also has to be attractive to generate market-beating forward returns.
Earlier this month, Macquarie provided its take on Lovisa in its SMID-Cap Best Picks July 2025 report.
The broker named it as one of the highest quality businesses in its small and mid-cap market.
Macquarie expects significant growth over the coming years, supported by store roll-out and EBIT margin expansion.
A major source of volatility earlier in the year came from the potential impact of Trump's tariffs. Given that its products are manufactured in China (with around 25% of sales made in the US), investors were concerned about profitability. Specifically, whether the company would need to absorb these costs. However, Macquarie expects Lovisa to offset any tariff impact with minor price rises.
Macquarie also noted that "the succession of the current CEO should lead to significant cost savings, and [Macquarie] expects EBIT margin expansion as a result."
Macquarie currently has a price target of $33.40 on Lovisa shares.
Given that shares closed at $33.42 yesterday, this suggests Lovisa will remain relatively flat from here.
Therefore, according to Macquarie, there may be better opportunities elsewhere ahead of earnings season.
Investors should wait for a more attractive price to buy Lovisa shares. And given Lovisa's volatile history, they're likely to get it if they're patient.
