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Total Sales Growth: 23.3% increase for the half year. Comparable Store Sales: Up 2.2% on the prior half year. Store Network: 1,095 stores at half year end, with 85 new stores opened. Underlying Gross Margin: 82.9%, up 50 basis points on the prior half year. Underlying EBIT: $109.1 million, up 20.4%. Underlying NPAT: $69.6 million, up 21.5%. Cash from Operations: $183.8 million, up 30.3%. Cash Capital Expenditure: $31.7 million, primarily for new store fit-outs. Interim Dividend: 53 cents per share, up 3 cents on prior year.

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Release Date: February 18, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Lovisa Holdings Ltd (ASX:LOV) achieved a milestone with sales exceeding half a billion dollars for the first time. The company opened 85 new stores in the first half of FY26, expanding its network to 1,095 stores. Underlying total sales increased by 22.7% for the half year, with a gross margin of 82.9%, up 50 basis points from the prior year. Strong growth was observed in the European and Americas markets, contributing significantly to new store growth. The company announced an increased interim dividend of 53 cents per share, reflecting strong cash flow and profitability.

Negative Points

Comparable store sales growth was modest at 2.2%, indicating potential challenges in driving same-store sales. Higher interest expenses and depreciation on store leases impacted profitability due to the rapid store expansion. The Jules brand, a strategic startup, incurred losses, raising concerns about its impact on overall financial performance. The Americas region faced challenges with weather conditions affecting sales, particularly during the holiday trading period. The company is facing competitive pressures in various markets, including the Americas and Australia, which could impact future growth.

Q & A Highlights

Q: What drove the increase in sales per store in the Americas, and was it influenced by US tariffs? A: John Cheston, CEO, explained that the increase was due to a buoyant consumer market and strong execution by the team, rather than US tariffs. The focus was on product delivery and store standards.

Q: Can you provide more details on the losses from the Jules brand and the path to reducing these losses? A: John Cheston stated that Jules is a modest investment aimed at potentially creating a second global brand. The losses were not significant in the initial phase as the brand only started trading in June. The company is refining the product and pricing strategy and will provide more updates as the brand progresses.

Story Continues

Q: Why did global comparable sales slow down during the holiday trading period, and which regions underperformed? A: John Cheston attributed the slowdown to weather issues in the northern hemisphere and the timing of the Chinese New Year. He mentioned that changes in retail teams and new product introductions in the APAC region are expected to improve performance.

Q: How is Lovisa handling the competitive dynamics in the Americas compared to Australia? A: John Cheston noted that competition is prevalent in all markets, including North America. The focus remains on product and retail operational excellence, which are within the company's control.

Q: What is the impact of currency volatility on the financial results, and how should it be expected to affect future results? A: Chris Lauder, CFO, explained that currency volatility affects both translation and sourcing. The company has a natural hedge due to its US dollar-denominated revenue and profit. The impact on future results will depend on exchange rate movements.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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