I view Lovisa Holdings Ltd (ASX: LOV) as one of Australia's top shares because of its existing qualities and how much growth it could deliver in the coming years.
The business is best-known as an affordable jewellery retailer across its global Lovisa store network. It also has a start-up business in the UK called Jewells.
I think it's one of the leading retail businesses to watch over the next five years because of how much it could expand its reach.
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Global growth aspirations
The business has dramatically expanded over the past decade, with its Lovisa network reaching 1,089 locations as reported in its FY26 half-year result.
Its store new work grew 15.4% on the prior year and 6.3% compared to the previous equivalent half.
Over the 12 months to December 2025, it added at least one store to the following markets: Australia, New Zealand, China, Vietnam, South Africa, Botswana, Zambia, the UK, Ireland, Spain, France, Germany, Belgium, the Netherlands, Poland, Italy, Hungary, UAE, USA, Canada, Mexico and its Middle East and Africa franchise.
Those regions offer the company a huge addressable market and a very long growth runway, making it one of Australia's most compelling shares.
If an ASX share can continue growing at a good pace for a very long time, it can generate great shareholder returns thanks to compounding.
Strong profit growth rate
Lovisa is aiming to grow its earnings over the long-term with its store network expansion, and that's coming through in the numbers.
Excluding the Jewells business, Lovisa reported that in HY26, its revenue soared 22.7% to $498.1 million (with 2.2% comparable store growth) and net profit after tax (NPAT) climbed by 21.5% to $69.6 million.
I think most businesses on the ASX would be delighted to grow underlying net profit by more than 20%. The profit growth rate is a key reason for my view that it's one of Australia's top shares.
Its increasing scale is helping some of its profit margins rise (despite the significant investing in expanding its store network). The core Lovisa business saw gross profit increase by 23.4% and operating profit (EBITDA) rose 24.4%.
According to the forecast on Commsec, the business is valued at 27x FY26's estimated earnings, with expectations that the company's earnings per share (EPS) could increase by 23.8% in FY27.
It looks much better value after falling 44% since August 2025, as the chart below shows.
Dividend cash payments
Shareholders consistently benefit from owning the business due to its growing dividend payments, which is another factor which makes this one of Australia's top shares, in my view.
I think it's good to see that the business is rewarding shareholders because investors aren't purely relying on capital growth to see improvements in their financials.
In the HY26 result, Lovisa decided to hike its payout by 6% to 53 cents per share.
The projection on Commsec suggests the business could increase its payout to approximately 99 cents per share in FY27 and then $1.13 per share in FY28.
At the current Lovisa share price, it offers a potential dividend yield of 5.7%, including franking credits, at the time of writing.
These are some powerful factors combining together that could lead to solid returns in the coming years.
