This morning the Lovisa Holdings Ltd (ASX: LOV) share price raced to an all-time high of $8.20 following the release of the jewellery retailer's half-year results.
For the six months ended December 31, Lovisa delivered revenue of $118.6 million and net profit after tax of $24.8 million. This was an 18.9% and 22.5% increase, respectively, on the prior corresponding period.
While a 10.8% increase in its store network played a role in this solid performance, an impressive 7.4% lift in like-for-like sales contributed strongly.
I think this was an exceptional performance considering how weak retail conditions have weighed heavily on other retailers, including the embattled Myer Holdings Ltd (ASX: MYR).
On the bottom line Lovisa generated earnings per share of 23.7 cents for the half, allowing it to declare a fully franked interim dividend of 13 cents per share.
Store growth.
Of the 31 stores that were added to its network in the first-half, over a third of them were in the UK market. Lovisa more than doubled its footprint in the U.K. to 23 stores during the half.
I expect more of the same in the future and believe it has a similarly strong opportunity in the market as Premier Investments Limited (ASX: PMV) does with its Smiggle brand.
Another highlight was the launch of its first store in the United States. Although no formal sales data was provided, since opening in November the store appears to have generated $150,000 in sales by my calculation.
Lovisa's Australian and New Zealand based stores generated on average approximately $450,000 of sales per store during the period. Which would put the U.S. store performance at least on a par with these stores based on its limited opening time. I believe this could be a sign that the brand has been well received and that an expansion throughout the U.S. is a possibility.
Should you invest?
Based on today's results, Lovisa's shares are changing hands at approximately 25x trailing earnings.
Whilst this isn't particularly cheap for a retail share, I think its current growth profile means it is deserving of this premium and would suggest investors consider snapping up it shares.
