Shares in Lovisa Holdings Ltd (ASX: LOV) were sold down sharply on Friday morning after the company announced like for like sales growth figures which missed consensus estimates by a wide margin.
The jewellery retailer said in a statement to the ASX that global total sales for the first 20 weeks of FY26 were up 26.2% on the same period in FY25, while comparable store sales were up 3.5%.
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New store openings driving growth
The large growth in total sales came from the company opening a number of new stores, as it said in a statement on Friday.
We continue to maintain our focus on expanding our global store footprint across all markets in which we operate, with 44 net new stores opened for the financial year to date, including 62 new stores opened and 18 closures (including 6 relocations). This has taken the store network to 1,075 stores across more than 50 markets, and we are currently trading from 148 more stores than this time last year.
But while the overall sales growth figures were strong, RBC Capital Markets said on Friday morning that same-store sales missed expectations by a significant margin.
As RBC said:
Total sales for the first 20 weeks for Lovisa have been solid, up 26% on the previous corresponding period, tracking ahead of consensus expectations of 22% for 1H26. However, on a like for like basis, 3.5% is below consensus expectations of 5.3% and showed a deceleration from Lovisa's August trading update of 5.6%.
RBC also noted that no details were given in the brief trading update released to the ASX about why sales were slow.
We believe this dynamic could be an outcome related to store roll-outs in higher revenue regions. We note the company has previously highlighted that stores in these regions will also exhibit higher cost of doing business.
Analysts divided on the outlook
Macquarie recently issued a research note on Lovisa, with a price target of $40.90 on the stock.
They noted that the collapse of a key competitor, tween fashion retailer Claire's, which operated about 2,750 stores across 17 countries, could be a positive for Lovisa, both in terms of capturing more market share and potentially acquiring some of its stores.
Macquarie said, for example, there were 57 stores in the UK, "that could provide geographic diversification benefits" were Lovisa to have the opportunity to purchase them.
The team at Citi has an even more bullish price target on Lovisa, recently publishing a price target on the stock of $42.50.
RBC, meanwhile, has a price target of $26 on Lovisa shares.
Lovisa shares were 10.3% lower on Friday morning at $31.22.
