Lovisa Earnings: Slower Store Rollout, but Pace Likely to Pick Up

No-moat Lovisa’s fiscal 2024 net profit after tax of AUD 82 million beat our estimate by 10%, owing to strong gross profit margin and slightly higher sales than we expected. Selective price rises, by product range and market, lifted gross profit margin by 110 basis points to 81%. This together with a material cut in CEO long-term incentive expenses helped mitigate significant labor cost inflation. Compared with the previous corresponding period, pretax margin remained relatively steady, up 30 basis points to 15.8%.