Accessories retailer Lovisa has provided a trading update heading into the Christmas trading period, telling the market on Tuesday morning that same store sales are slightly above its long-term target between 3 – 5 per cent like for like growth.
The retailer has opened 16 new stores so far in FY18, which represents more than half of the 20-30 locations it plans to open, bringing the total network to 304 globally.
The company did say that its mindful about trading performance on the prior corresponding period heading into Christmas, given that it’s cycling some “particularly successful ranges”.
“As much as this is a pleasing start to the financial year, over the coming months we continue to cycle some particularly strong ranges from last year,” managing director Shane Fallscheer told investors at Lovisa’s AGM.
“Coupled with this we remind everyone that both Spring Racing and especially Christmas are still to come and play a very large part of both our first half and full year’s performance.”
Reflecting on FY17, chairman Michael Kay said he was “delighted” with the performance after a tough FY16, which he conceded was a difficult year for the company.
“We said we had learned from the events of FY16, that we were building bench strength at board and management levels and were determined to invest ahead of our growth ambitions to ensure we had the capability to manage our increasing footprint and the risks inherent in businesses of this type,” he said, noting year-to-date trading is currently above budgetary expectations.
“In that context, the board is delighted with your company’s performance in FY17.”
Lovisa booked a 75 per cent increase in net profit after tax to $29 million in FY17, underpinned by a 10.3 per cent increase in like-for-like sales.
Its US expansion trial will be underway from next month with the opening of a store at Glendale Galleria – a large suburban mall in Los Angeles – which is the first of a small group of pilot stores to open in California.
“We don’t intend to talk to the performance or the duration of pilot programs which again are currently underway in Spain and soon to be the US,” said Fallscheer.
“Once the board make any decisions in the future in regards to any markets where we are running pilot programs we will announce this to the market at this time.”