Australian low-price accessories brand Lovisa has recorded a revenue lift of 33.1% in FY23 to $596.5 million.
Lovisa cited the implementation of price increases during the third quarter of FY22, which grew sales through the fourth quarter and continued through the first three quarters of FY23, with a reported minimal impact in sales volumes.
As the company cycled these price increases in the second half of FY23, it recorded a softening in comparable company analysis - a valuation that looks at ratios of similar public companies and uses them to derive the value of another business.
Lovisa recorded a gross margin of 80%, with a gross profit up 34.8% to $476.7 million. Net profit after tax was up 20.1% to $68.2 million, and its operating cash flow was at $188 million, up 24.8%.
Meanwhile, Lovisa expanded into 12 new markets during the financial year, opening 210 new stores totalling 801 altogether, with the accessories brand noting this as a major driver for total sales growth.
New markets include Hong Kong, Taiwan, Namibia, Botswana, Mexico, Italy, Romania, Hungary, and Spain and new franchise markets in Columbia, Peru and Morocco, following the opening of Poland and Canada at the end of FY22.
The USA market has overtaken Lovisa's Australian market as the largest store network, with 78 new stores opened in the US. The market now operates 190 stores at financial year end, above Australia's 168. Lovisa opened 17 in Australia in FY23.
Despite this ongoing investment, the cost of doing business (CODB) was controlled according to Lovisa, helping mitigate inflationary pressures on labour and other costs. Lovisa noted it saw increased pressure on CODB as a percentage of sales as sales growth slowed in the second half.
For the first seven weeks of FY24, comparable store sales were down 5.8% on the same period in FY23.
Total sales for the same period are up 13.1%, with 21 new stores opened and eight closed.
Lovisa CEO Victor Herrero said the momentum in its global store rollout has delivered strong top-line sales growth.
“The company has been able to continue to deliver strong profit growth while investing in the structures to support our global expansion in the face of more difficult trading conditions in the second half, which leaves us well placed as we move forward with store rollout in both existing and new markets,” Herrero said.
“I want to again thank the entire global Lovisa team for their exceptional work to deliver these results.”