Key Highlights

  • Revenue rose 17.6% to $938.8 million and net profit after tax rose 10.7% to $95.6 million.
  • Europe sales rose 29.5% to $364.3 million and Americas sales rose 29.6% to $275.9 million, while the home region declined 5.7%.
  • Lovisa ended the year with 1,136 stores in more than 50 markets, after opening 160 and closing 43.
  • In the first eight weeks of FY27, total sales rose 16.4% in constant currency and comparable store sales rose 3.0%.

How is Lovisa (ASX:LOV) still growing at double-digit rates when sales in Australia and New Zealand are shrinking? The FY26 results, released on 26 August 2026, point to a store-led answer: the fast-fashion jewellery retailer lifted Revenue 17.6% to $938.8 million, with Europe and the Americas each growing almost 30% while its home region declined 5.7%.

The Business model

Lovisa sells low-priced fashion jewellery and accessories through small, mall-based stores. It owns most of its network directly and uses Franchise partners in some markets. Revenue growth comes from opening stores, lifting sales in existing stores and expanding the product range, including piercing services.

The company reports a very high gross margin, which was 82.6% in FY26, up 60 basis points. High gross Margin gives it room to absorb rent, wages and freight, but those costs rise with each new store.

FY26 results

For the 52 weeks to 28 June 2026, revenue was $938.8 million, Gross Profit $775.3 million (up 18.4%) and EBITDA $301.1 million (up 20.9%). EBIT rose 14.1% to $158.2 million, and net profit after tax rose 10.7% to $95.6 million. Earnings Per Share were 86.3 cents, up 10.5%.

Comparable store sales grew 2.0%, meaning most of the revenue growth came from additional stores rather than existing-store momentum. EBIT growth lagged sales growth, which implies, in our calculation, an EBIT margin of about 16.9%, because Depreciation and store costs are rising with the network.

Where the growth is coming from

Europe sales rose 29.5% to $364.3 million and Americas sales rose 29.6% to $275.9 million. Africa and the Middle East grew 12.8% to $65.7 million. Australia and New Zealand sales fell 5.7% to $193.4 million, and Asia fell 3.8% to $36.7 million.

Chief executive John Cheston said the company is "insulated to the market in Australia in some regards". The regional split shows that the group's growth now depends mainly on offshore markets, particularly the UK, France, Germany and the United States.

Within Europe, the largest country networks are the UK with 111 stores, France with 92 and Germany with 80. In North America, the company-owned network comprises 250 stores in the United States, 52 in Canada and five in Mexico. The Mexican presence is small and still in early stages.

Store rollout and balance sheet

Lovisa ended the year with 1,136 stores in more than 50 markets, up from 1,031. It opened 160 stores and closed 43. Europe accounts for 399 company-owned stores, the Americas 307, Australia and New Zealand 217, and Africa and the Middle East 103, with 63 in Asia and 47 franchised.

Capital expenditure was $58.5 million, including 148 new company-owned stores. Cash from operations was $294.5 million, up 21.0%. Closing cash was $46.7 million against loans and borrowings of $87.0 million, giving net Debt of $40.3 million. Debt facilities were extended by three years, including $120 million of committed term debt. Net cash from operations was $232.8 million and inventory was $70.7 million.

The full-year Dividend was 86.0 cents per share, up 11.7% and equal to 100% of net profit. The final dividend of 33 cents was 50% franked and payable in October 2026.

Africa and the Middle East is heavily weighted to South Africa, which has 89 of the 103 company-owned stores, with smaller footprints in the UAE, Namibia, Botswana and Zambia. In Asia, Malaysia has 38 of 63 stores. Both regions are small relative to Europe and the Americas, and Asia shrank in the year.

The results presentation did not discuss tariffs or Import costs, and we have not verified how trade policy affects the company.

Trading since year end

In the first eight weeks of FY27, total sales rose 16.4% in constant currency and comparable store sales rose 3.0%, with improving momentum in August. This is a trading update, not guidance, and a short window can be affected by timing and weather. The presentation contained no formal earnings guidance, and six new franchise markets opened during the year.

Management said there is a long runway for new stores, particularly in Europe, the United States and Canada. It also scheduled 28 "Series 5" store fit-outs for the first half of FY27.

Store formats and new concepts

Lovisa's store initiatives include the Series 5 store concept with dedicated piercing stations and promotions offering free ear and nose piercing with a starter stud purchase. It is also testing a premium format called Jewells, which had seven UK stores by the end of FY26. The company has not reported results for that test in the material we reviewed, so its contribution cannot be judged.

Risks and what to monitor

Each new market carries execution risk, from Lease costs to consumer preferences, and the company relies on landing sites in busy shopping centres. A slowdown in comparable sales would expose the reliance on new stores. Foreign-exchange movements affect both reported revenue and costs, since most sales are now outside Australia.

Further points include competition from the former executives' ventures, the progress of Jewells, and the Australian market's softness, which management has framed as a regional issue rather than a group-wide one. Investors could also watch store openings against closures, since 43 shops closed in FY26 alongside 160 openings, margins as costs rise, and the company's next trading update.

Unless stated, figures are reported FY26 results in Australian dollars. Outlook remarks are management comments, and the interpretation of margins and risks is our own.