At a time when we had to re-evaluate our spending on everyday necessities, few compromises were made on the luxury front, with people still willing to spend generously on accessories. For FY22, fast fashion jewellery brand Lovisa (ASX: LOV) reported $548.7 million in revenue, a 59.3% increase on the previous year.
The Company’s comparable store sales were up 19.9% on FY21, with 85 net new stores opening during the year, bringing the total stores tally to 629 at year end. It also delivered EBIT of $79.7 million for the financial year, up 86.6% on FY21.
On the strong revenue growth, CEO Victor Herrero commented, “I’m thrilled with the acceleration in the performance of the business over this financial year. 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.”
As per the Company’s report, a key contributor to Lovisa’s revenue is its global store roll out strategy. The Company opened over 80 stores across 24 countries in FY22, while also shutting down 19 stores that weren’t performing up to its standards. It added two new markets to its portfolio, namely Poland and Canada, and two new franchise markets in the Middle East (Cyprus and Lebanon). It also successfully opened its first store in Northern Ireland during the financial year.
Throughout Covid, Lovisa’s online stores also proved profitable for the Company.
In the past financial year, the ecommerce store delivered a sales growth of 30% on FY21.
However, store disruptions and closures in Australia, New Zealand and Malaysia caused Lovisa to lose out on more trading days than in FY21. Still, the Company was able to maintain its overall comparable store sales momentum. Once its stores opened, economic activities restarted and restrictions lifted, the jewellery brand’s sales also experienced an uptick.
The Company was also not immune to inflationary pressures that persisted across the world, and to address those, it increased its product prices during Q3 of the financial year. The prices didn’t deter customers, as Lovisa continued to deliver strong sales growth with minimal impact experienced in volumes.
While all markets witnessed growth in FY22, Asia lagged behind. The sales in the region continued to be affected by Covid. Low tourism combined with continued local restrictions are contributing to Lovisa’s slow recovery in Asia.
Since the end of the financial year, Lovisa has also opened its first two stores in Hong Kong and its first in Namibia. For FY23, the Company aims to focus on its global strategy while also tapping into its digital capabilities. It is driven to build a store network that will position Lovisa for more financial growth in the coming years.
Alinda is a Business Reporter for The Sentiment
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