The ASX dividend stock Lovisa Holdings Ltd (ASX: LOV) has dropped heavily over the last year. The Lovisa share price has dropped 50% since August 2025.
Lovisa is one of the world's leading affordable jewellery businesses, with its global store network spread across every continent.
In fact, the business has at least 20 stores in each of the following countries: Australia, New Zealand, Malaysia, South Africa, the UK, France, Germany, Poland, USA and Canada.
There are multiple reasons why the ASX dividend stock looks really appealing to me. Let's dive into it.
Image source: Getty Images
ASX dividend stock credentials
As a retailer, I think it would be unwise to think that the business can grow its dividend every single year. But the long-term trend is very compelling.
In FY19 – the last year before COVID-19 impacts – the business paid an annual dividend per share of 33 cents. That compares with the two most recent half-year dividends declared by the business, which amounted to 80 cents per share. In other words, in seven years, the Lovisa dividend has grown by approximately 140%.
At the time of writing, its most recent dividends come to a dividend yield of 3.7%, excluding franking credits. Based on the latest dividend's franking credit rate of 50%, that translates into a grossed-up dividend yield of 4.4%.
Lovisa may not have the biggest dividend yield around, but it's dividend growth that could make it particularly attractive today.
The Commsec forecast suggests the company's annual dividend per share could climb to 89 cents in FY27 and 95 cents per share in FY28.
Business growth to drive passive income growth
All the ASX dividend stock seemingly needs to do to grow its payout is expand its global store network, as this will broaden its customer reach and provide scale benefits.
In the FY26 half-year result, the business reported that the global Lovisa store count increased by 15.5% to 1,089. The Lovisa store network achieved revenue growth of 22.7% to $498.1 million and 21.5% growth of net profit after tax (NPTA) to $58.4 million.
The company has also opened a new business in the UK called Jewells, with a higher price point, which gives Lovisa another growth avenue.
But, the most growth is likely to be found in expanding store networks in countries where there's clearly a growth avenue for more locations (based that market's population), such as the US, Mexico, Italy, the Netherlands, the UK, China, Germany, France and Canada.
According to the Commsec projection, the Lovisa share price is now valued at 21x FY27's estimated earnings. If its earnings can continue growing, I think it's got a very good chance of hiking the dividend in the years ahead.
