Lovisa share price lifts as full-year profit surges 116%

The Lovisa Holdings Ltd (ASX: LOV) share price is in the green after the jewellery retailer released its earnings for financial year 2022 (FY22).

After opening 6% higher at $19.80, the Lovisa share price is currently $19.92, 6.7% higher than its previous close.

Lovisa share price rises as dividend doubled

Here are the key takeaways from the company’s earnings for the 53 weeks ended 3 July:

• Revenue came in at $458.7 million – a 59.3% improvement on that of the prior corresponding period (pcp)
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) lifted 61.6% to $97.2 million
• Net profit after tax (NPAT) rose 116.3% to $59.9 million
• Earnings per share (EPS) increased to 55.7 cents
• Declared a 37 cent, 30% franked final dividend – more than double that of FY21, bringing full-year dividends to 76 cents

Lovisa’s comparable store sales also lifted 19.9% in FY22 on those of the pcp despite COVID-19-induced store closures in Australia, New Zealand, and Malaysia early in the period. Meanwhile, its e-commerce sales grew 30%.

In response to rising inflation, the company implemented price increases in the third quarter. That delivered sales growth with minimal impact to volumes.

It ended the period with $24.2 million of net cash.

What else happened in FY22?

Sadly, the Lovisa share price slumped 11% over the course of FY22 despite posting a 12% gain on the back of its half-year earnings.

The retailer also bid goodbye to its former CEO of 12 years Shane Fallscheer last financial year. He was succeeded by Victor Herrero.

Finally, the company opened 104 new stores and closed 19 during the period, entering new markets in Poland and Canada, as well as new franchise markets in Cyprus and Lebanon.

What did management say?

Herrero commented on the company’s earnings, saying:

I’m thrilled with the acceleration in the performance of the business over this financial year. I would like to thank the team for helping to deliver a seamless transition for me into the business and remaining laser-focused on the continuing success of Lovisa globally. The financial result the team have been able to achieve this year is very pleasing, with the business continuing to go from strength to strength and well placed to take advantage of future opportunities as they arise.

What’s next?

The company didn’t provide any new earnings guidance today. Though, it did provide a trading update for FY23 so far.

Its comparable store sales lifted 21% over the first seven weeks of this fiscal year on that of the pcp. Total store sales have also grown 66.1%, with the pcp having been impacted by lockdowns.

The company has also entered two new markets – Hong Kong and Namibia – since the end of last financial year.  

Lovisa share price snapshot

The Lovisa share price has outperformed the broader market in 2022.

It has sunk 4.5% since the start of the year and 1.4% since this time last year.

For comparison, the All Ordinaries Index (ASX: XAO) has dumped 7% year to date and 6% over the last 12 months.

The post Lovisa share price lifts as full-year profit surges 116% appeared first on The Motley Fool Australia.

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

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