LOV -Lovisa

 LOV - lovisa 

2/07/26

http://www.lovisa.com

https://www.lovisa.com.au/pages/investor-centre

https://www.intelligentinvestor.com.au/shares/asx-lov/lovisa-holdings-limited

https://simplywall.st/stocks/au/retail/asx-lov/lovisa-holdings-shares

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Over the last 5 years, ASX:LOV has demonstrated outstanding profitability and rapid global store expansion, accompanied by a highly leveraged balance sheet. Despite massive revenue and profit increases over the past half-decade, recent retail headwinds have caused share prices to fluctuate, currently sitting at around $23.25

Financial Highlights

• Profit: The company has seen immense top-line growth. Total revenue expanded from roughly $250 million five years ago to almost $893 million over the last 12 months (TTM). Net profit after tax (NPAT) has grown consistently, hitting $87.8 million in FY 2025 and $58.4 million in the 1H 2026 reporting period. [1, 2, 3, 4, 5]

• Debt: Lovisa carries a substantial debt load, which has grown alongside its international rollout of over 1,000 stores. While the company operates with a high Debt/Equity ratio, it offsets this with robust operating cash flows and generally maintains solid interest coverage. [1, 2, 3]

Lovisa Holdings Limited (ASX: LOV) has a total debt-to-equity ratio of approximately 445.41%. This high ratio reflects significant leverage, primarily driven by long-term lease liabilities associated with their expansive global retail footprint.

https://simplywall.st/stocks/au/retail/asx-lov/lovisa-holdings-shares/health

• ROE (Return on Equity): A standout feature of Lovisa has been its blistering historical profitability, consistently delivering an exceptionally high ROE that generally averages between 80% and 94%. [1, 2, 3]

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PE Values

Lovisa Holdings Limited (ASX: LOV) has traded at a historical 10-year mean P/E ratio of 35.57x, reflecting its aggressive global rollout strategy and high market growth premium. Its valuation has experienced significant volatility, particularly during the COVID-19 pandemic when retail earnings fluctuated sharply. [1, 2, 3, 4, 5]

As of July 2026, Lovisa's current trailing P/E ratio sits at 27.99x, which is roughly 24% below its long-term median. [1, 2]

Historical P/E Ratio Breakdown (2016–2025)

The table below tracks Lovisa’s historical trailing P/E ratio at the close of each fiscal year (ending June): [1, 2, 3, 4, 5]

Fiscal Year [1, 2, 4, 5]	P/E Ratio	Key Market Context & Drivers
2025	40.1x	Premium retained via strong European and Americas store expansions.
2024	43.0x	Global store footprint passed 800 stores, boosting investor optimism.
2023	30.1x	Post-pandemic operational normalization alongside aggressive network growth.
2022	29.7x	Global supply chain bottlenecks and inflation temporarily compressed the multiple.
2021	113.3x	Earnings dropped sharply during pandemic lockdowns while the stock price rebounded.
2020	-10.3x	Briefly negative as global store closures triggered localized financial year losses.
2019	33.1x	High-growth premium established during successful early international pilots.
2018	28.5x	Steady footprint growth in South Africa and the United Kingdom.
2017	22.0x	Transitioning from a small-cap domestic retailer to an international brand.
2016	13.5x	Early listing years with valuation heavily anchored to standard ASX retail peers.

Summary of 10-Year Extremes

• 10-Year Maximum (113.3x in 2021): Driven by an artificial compression of trailing earnings during peak global lockdowns, paired with forward-looking share price recovery. [1, 2]
• 10-Year Minimum (13.5x in 2016): Occurred when Lovisa was primarily viewed as a cyclical fashion retailer before proving its highly scalable, vertically integrated corporate model. [, 2]
• 10-Year Median (36.9x): Reflects the sustained "growth premium" investors assign to its rapid corporate store replication model. [1, 2]

• Share Price: Despite long-term earnings growth, recent market adjustments have pressured retail stocks (partially due to rising labor costs). The stock is well off its all-time highs of over $43, lingering near the bottom of its 52-week range. I think its good value in the $15 to $20 range. [1, 2, 3, 4, 5]

Dividends

Mostly in the 3% range - 50% franking.... so keep within super

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ROIC vs WACC 2026

For Lovisa Holdings (ASX:LOV), the return on invested capital (ROIC) consistently outpaces its weighted average cost of capital (WACC), historically maintaining a positive value-creation spread. Current metrics show an ROIC of approximately 17.22% to 20.74% against a WACC of roughly 9.52% to 15.27% (with a 10-year WACC median around 13.37%). [1, 2, 3, 4]

Current Return vs. Cost of Capital

ROIC: Trailing figures indicate returns between 17.22% and 20.74%, reflecting strong capital efficiency in its global store rollout.
WACC: Current estimates range from 9.52% to 15.27%, tracking roughly 14% above its historical 10-year median.
Spread: Because ROIC remains comfortably above WACC, Lovisa continues to generate positive excess economic returns on its invested capital. [1, 2, 3, 5]

Long-Term 10-Year Trend Dynamics

Value Creation: Throughout most of the past decade since its listing, Lovisa Holdings has sustained an ROIC well above its blended cost of capital. [1, 2]
Capital Efficiency: High operating and gross margins (averaging ~76% gross margins) have allowed the firm to fund international expansion while keeping economic spread positive. [1, 2, 3]
Fluctuations: Periodic bumps in WACC reflect shifts in market-wide risk-free rates, equity risk premiums, and company beta, but historical delivery has consistently stayed value-accretive. [1, 3]

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