Lovisa has implemented price increases during Q3 of FY22 and controlled CODB in an effort to tackle inflation, with the company doubling its revenue compared to FY21.
According to the company, CODB was tightly managed, which mitigated inflationary pressures on labour costs and the ongoing challenge of high logistics costs.
Gross profit was up 63.8% on FY21 with gross margin at 78.9%, buoyed by price increases implemented in the second half and favourable exchange rates compared to prior year, partly offset by continued higher freight costs.
Comparable store sales were up 19.9%, with momentum maintained despite covid disruptions in Q1, where Australia, New Zealand and Malaysia saw temporary closures and lost trading days. CODB was also impacted by those temporary store closures.
As economic conditions improved following lifted restrictions, the company began to see strong sales growth.
For the financial year, Lovisa reported a $458.7m increase (59.3%) in revenue from FY21.
Whilst all markets remain strong for FY22, Asia continues to be Lovisa’s most challenging region with lower levels of tourism continuing to restrain performance.
Cash flow continues to strengthen despite Lovisa having to catch up on supply chain issues and deferred rent payments over the financial year.
The company saw higher stock counts, citing the additional warehouse in Poland as a contributing factor.
Lovisa also noted its global store portfolio, including the exiting of underperforming stores, as key opportunities for growth.
In Australia, the company opened six new stores and closed five underperforming stores, bringing the country’s total count to 154.
Across the globe, Lovisa opened 85 stores for FY22, taking the total store network to 629 stores globally across 24 countries. This includes two new markets in Poland and Canada, and two franchise markets in the Middle East.
Digitally, the company has improved its overall execution, with online sales delivering a 30% growth in sales on the same time last year.
Lovisa will also implement dedicated online fulfilment warehouses in key markets to meet demand, with ongoing work underway to improve delivery experiences for customers.
Despite the challenges, Lovisa CEO Victor Herrero is optimistic in the acceleration of overall business performance.
“I would like to thank the team for helping to deliver a seamless transition for me into the business and remaining laser-focused on the continuing success of Lovisa globally,” Herrero said.
“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.”