Key Highlights

• For the year ended 28 June 2026, Lovisa reported Revenue of $938.8 million, up from $798.1 million a year earlier.

• Gross Profit reached $775.3 million, and gross Margin improved by 60 basis points to 82.6%.

• EBIT rose 14.1% to $158.2 million, while net profit after tax increased 10.7% to $95.6 million.

• The final Dividend was 33 cents per share, 50% franked, taking the full-year payout to 86 cents.

Why is Lovisa Holdings (ASX:LOV) still adding stores at pace while its home market shrinks? Because the jewellery retailer's growth has shifted decisively to Europe and the Americas, where its FY26 results showed sales rising by nearly 30% in each region while Australia and New Zealand slipped back. That geographic rotation, and what it costs in margin and execution, is the central question for the business.

The FY26 result in brief

For the year ended 28 June 2026, Lovisa reported revenue of $938.8 million, up from $798.1 million a year earlier. Gross profit reached $775.3 million, and gross margin improved by 60 basis points to 82.6%.

Profit grew more slowly than sales. EBIT rose 14.1% to $158.2 million, while net profit after tax increased 10.7% to $95.6 million. Earnings Per Share were 86.3 cents.

The final dividend was 33 cents per share, 50% franked, taking the full-year payout to 86 cents. That equals 100% of full-year earnings, a high payout for a company that is also funding a large store programme.

What Lovisa does

Lovisa sells fashion jewellery and accessories at accessible prices through small, high-traffic stores, typically in shopping centres. It is vertically integrated in design and sourcing, which supports the very high gross margin, and it turns over its ranges frequently to keep customers returning.

Revenue has two main drivers: the number of stores trading and sales per store. Comparable store sales, which strip out the effect of new openings, rose just 2.0% in FY26. The bulk of the growth therefore came from a larger network rather than from existing shops selling much more, which is worth keeping in mind when reading the headline figure.

Where growth is coming from

Regional figures show how uneven the picture is. Europe sales grew 29.5% to $364.3 million, and the Americas grew 29.6% to $275.9 million. Australia and New Zealand fell 5.7% to $193.4 million, and Asia declined 3.8% to $36.7 million.

The store network grew from 1,031 to 1,136 over the year. Lovisa opened 160 stores and closed 43 underperforming ones, with a further 12 relocated. Europe accounted for 76 of the openings, including 34 in the UK and 20 in Germany, and 44 were in the United States and Canada. Six new Franchise markets were added (Réunion, Mauritius, Ghana, Kenya, Burkina Faso and Iraq), taking the footprint beyond 50 markets.

The company has also been rolling out a refreshed store format known as Series 5. Fifty-three have opened, with 28 more scheduled for the first half of FY27.

Cash flow and balance sheet

Operating Cash Flow before interest and tax rose 21.0% to $294.5 million. Capital Expenditure was $58.5 million, including 148 new company-owned stores. Net Debt at year end was $40.3 million, made up of $87.0 million of loans less $46.7 million of cash.

Debt facilities were extended for three years, with $120 million of committed term debt. Management says new stores and refurbishments are funded from existing cash flows. On these figures the Balance Sheet looks conservative, although the dividend payout leaves little Retained Earnings buffer beyond operating cash flow.

Early FY27 trading

Alongside the result, Lovisa gave a trading update for the first eight weeks of FY27. Total sales rose 16.4% in constant currency compared with the same period a year earlier, and comparable store sales rose 3.0%. Management said momentum improved during August.

Two cautions apply. Eight weeks is a short window, and the figures are in constant currency, so reported results could differ if exchange rates move. Lovisa has historically updated shareholders around its Annual General Meeting in November.

Competitive position and sector conditions

Fashion jewellery is a crowded, fragmented market. Lovisa competes with department stores, fast-fashion chains, online sellers and other specialist accessory retailers. Its advantages are scale in sourcing, a fast product cycle and a low price point that makes purchases discretionary but inexpensive.

That discretionary nature is also a vulnerability. Consumer spending in each market responds to household budgets, and mall traffic can shift. The slower comparable sales growth in FY26 suggests that existing-store productivity is not the main source of expansion at present.

Risks and uncertainties

Several issues deserve attention.

First, store maturity. New stores in the UK, Germany and the United States need time to reach their potential, and some will not. The 43 closures in FY26 show that not every location works.

Second, cost growth. Earnings rose more slowly than revenue, so the question is whether the margin on newer stores matches that of the established base. Rising rents, wages and trial-brand start-up costs all feed into this.

Third, the home market. Declines in Australia and New Zealand sales, together with Asia, mean the group relies increasingly on overseas growth. Currency movements and trade conditions, including tariffs and sourcing costs, can influence results in ways management cannot control.

Fourth, the Jewells trial. It is small, but it signals the company is testing new formats, which brings both opportunity and the possibility of distraction.

What to watch next

The next scheduled event is the AGM, typically in November, followed by half-year results, which the company has previously reported in February. Investors may want to track comparable store sales, the pace of Series 5 rollouts, the progress of Jewells, and whether the gross margin holds as the mix shifts towards Europe and the Americas.