It has been a brutal period for ASX retail stocks.
Consumer confidence has slumped toward historic lows as higher interest rates and cost-of-living pressures squeeze household spending. Unsurprisingly, retail share prices have taken a heavy hit.
Shares in Temple & Webster Group Ltd (ASX: TPW) fell another 6% on Wednesday to $4.98 after briefly touching a fresh 52-week low of $4.54 earlier in the session. Meanwhile, Lovisa Holdings Ltd (ASX: LOV) dropped 1.3% for the day and continues hovering near yearly lows.
Zooming out, the damage looks even more severe. Temple & Webster shares are down around 64% year to date, while Lovisa has fallen approximately 27%.
So, are these ASX retail stocks becoming bargain buys?
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Temple & Webster: runway for expansion
Investors aggressively sold Temple & Webster shares on Wednesday after the online furniture retailer released FY26 guidance that appears to have disappointed the market.
The company expects FY26 revenue between $665 million and $675 million, representing growth of roughly 11% to 12% compared to the prior corresponding period. EBITDA guidance sits between $20 million and $22 million, implying growth of around 6% to 17%.
While those figures still point to expansion, investors likely hoped for stronger earnings momentum given the company's historical growth profile.
The broader retail environment also remains difficult. Consumer spending continues facing pressure from elevated interest rates, while housing activity has remained uneven across Australia. At the same time, investors have become far less willing to pay premium valuations for online retail growth businesses.
Still, Temple & Webster may retain a compelling long-term opportunity. Furniture, homewares and home improvement remain enormous retail categories, and the company still controls only a relatively small share of the overall market. That leaves significant runway for future expansion if spending continues shifting online over time.
Importantly, after collapsing roughly 82% from its all-time-high, a large amount of bad news may already be reflected in the share price.
For patient long-term investors, the ASX retail stock could become increasingly interesting at these lower levels.
Lovisa Holdings: global fast-fashion footprint
Lovisa tells a different but equally volatile retail story. The $2.5 billion ASX retail stock has built a global fast-fashion jewellery empire through rapid product turnover and quick responses to changing consumer trends. Its ability to adapt quickly has been one of the company's greatest strengths.
But the bigger attraction remains international expansion. Lovisa has aggressively rolled out stores across Europe, the US and Asia, creating a substantial long-term growth runway if execution remains strong. That global footprint continues separating Lovisa from many smaller domestic retail competitors.
However, investors have become increasingly cautious. Cost inflation, weaker consumer spending and concerns around profit margins have all weighed heavily on sentiment. Retail businesses remain highly sensitive to economic conditions, and Lovisa is not immune to those pressures.
Still, if consumer confidence eventually improves and global store expansion continues delivering results, the recent weakness in Lovisa shares may start looking far more attractive in hindsight.
According to TradingView 8 out of 15 the analysts covering the ASX retail stock rate it a buy or strong buy. The average 12-month price target is set at roughly $30, which points to a 38% upside.
