1 ASX dividend share down 48% I’d buy right now

The Lovisa Holdings Ltd (ASX: LOV) share price has seen a significant decline within the last year, dropping by 48% since August 2025, as the below chart of the ASX dividend share shows.

Lovisa sells affordable jewellery across numerous markets through its global network of stores. At the end of the FY26 half-year result, it had 1,089 stores.

There are a number of reasons why the ASX dividend share is a compelling buy for both passive income and total returns.

Growing dividend

Every income investor probably wants to know what the dividend yield is for this business. I’ll get to that soon, but I believe it’s more important to see that the business is growing its dividend.

To me, dividend growth suggests the business isn’t likely to give investors a passive income cut – those dividend payouts could be essential for someone’s personal finances. A rising (sustainable) dividend also suggests that the company’s earnings are headed in the right direction.

In the FY26 half-year result, Lovisa’s board of directors decided to increase the interim dividend per share by 6% to 53 cents. In 2023, the interim dividend was 38 cents per share and in 2019 it was 18 cents per share.

I’m not sure how big the dividend will be in a few years’ time, but the forecast on CMC Invest suggests the business could pay an annual dividend per share of $1.12 in FY28. At the current Lovisa share price, that translates into a dividend yield of 6.1%, including franking credits.

Global expansion

One of the main reasons to like Lovisa so much is that it’s delivering rapid growth of its global store network in numerous markets. Some of the places it’s in include Australia, New Zealand, Malaysia, China, Vietnam, South Africa, the UK, the USA, France, Germany, Spain, and plenty more.

Store expansion is a key driver of the ASX dividend share’s financials. The HY26 store count reached 1,089, up 6.3% half over half and up 15.5% year over year. This helped Lovisa revenue rise 22.7% year over year and net profit increase 21.5%.

As long as the company’s comparable store sales growth remains positive over time, I believe its global expansion will turn out successfully. In HY26, comparable store sales growth was 2.2.%, showing the benefit of scaling up.

Rising margins

Some businesses don’t see much growth in their margins as they expand.

Lovisa is investing heavily in growth, so I’m not expecting every single result to have a higher profit margin.

The ASX dividend share reported in the HY26 result a gross profit margin of 82.9%, which has increased in each half-year result going back to FY21 when it was 77.2%. This is a strong tailwind for operating profit (EBIT) and net profit margin improvements.

By FY30, I think the business will be significantly more profitable and pay a larger dividend. At this lower price, I think it’s a great price to buy.

The post 1 ASX dividend share down 48% I’d buy right now appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa. The Motley Fool Australia has recommended Lovisa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.