Lovisa Holdings Ltd

LOV Details
· Positive profit guidance: Lovisa Holdings Ltd (ASX: LOV) stock made an outstanding rally of 12.4% on December 13, 2016 driven by their positive guidance on the performance. Management reported that their same store sales growth is more than 10% during this year to date of FY17. Gross margin is over 77% which is better than estimated as the group’s declining clearance activity and focus on inventory management is paying off. LOV now forecasts better earnings before interest and Tax (EBIT) in the range of $26 million to $28 million for the half year of FY17. The group believes that most of their same store sales growth is price related as opposed to volume related. The group’s focus on inventory position and merchandising is also enhancing the margins. Lovisa Holdings store network enhanced to 268 stores while 7 stores would be trading in the UK during Christmas.

· Recommendation: LOV stock surged over 47.7% in the last six months (as of December 12, 2016) and this momentum is expected to continue given the ongoing improving performance. We give a “Hold” recommendation on the stock at the current price of – $ 3.90

Super Retail Group Ltd

SUL Details
· Integrated five retail brands into Afterpay’s online payments platform: Super Retail Group Ltd (ASX: SUL) stock soared 2.8% on December 13, 2016 with some positive sentiments while National Australia Bank Ltd ceases to be substantial holder in the group. SUL recently integrated five of their core retail brands into Afterpay’s online payments platform and the same were said to be live from November 29, 2016 on a 12-month pilot basis. With this move, the group’s customers would reap benefits that Afterpay offers. Moreover, Afterpay’s customer base is constantly increasing and the group could leverage this opportunity as well.

· Recommendation: SUL stock has been consolidating since the last four weeks and rose 0.76% (as of December 12, 2016). We believe the stock has potential to rise in the coming months and give a “Hold” recommendation at the current price of – $ 9.49

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