International expansion boosts Lovisa results as it prepares to go online
Written on the 22 August 2018 by David Simmons
Australian jewellery retailer Lovisa (ASX: LOV) made a significant push overseas in FY18, boosting its results as an effect.
Revenue was up 21.4 per cent to $217 million and NPAT was also up 23.8 per cent to $36 million.
The retailer, still operating entirely as a bricks and mortar outlet, says its international expansion was a key driver for growth in the period.
During the year, 52 new stores were opened and 14 were closed, leaving Lovisa with 326 at the end of the financial year.
Managing director Shane Fallsheer says further international expansion is in the group's future.
"We are pleased that we have been able to continue the momentum from the very strong start to the year through the second half in the face of some great ranges from prior year and four years of strong comps to deliver another excellent result," says Fallsheer.
"It's pleasing that we were able to continue to invest into the structures to support our global expansion and at the same time continue to deliver strong results from existing markets. This leaves us well placed to execute on our future growth strategy."
During the year, Lovisa made its entrance into the French and US markets, opening two new stores in France and one in the US. The biggest growth area appears to be the UK, with Lovisa's footprint increasing from 11 stores to 24.
The company hopes that before Christmas it will have at least seven stores in each of the US, France, and Spain markets.
Interestingly, Lovisa is still yet to open an e-commerce channel, unlike most of its competitors. The group says that a dedicated online sales platform will open in the next financial year.
The group's strong cash flow has allowed Lovisa to pay off all its debt, meaning the directors have declared an increased dividend, up 30 per cent to 14 cents per share.
As part of its FY18 results, Lovisa announced that Michael Kay will be stepping down from his position of chairman and director of the company from October 2018. Co-founder Brett Blundy will now join the Lovisa board and assume the role of chairman.
Business News Australia
Author: David Simmons