2 ASX shares with impressive global growth plans: experts

Global growth is a big part of the outlook for these two ASX shares.

| More on:
Rising arrow on a piggy bank with a woman holding it and smiling.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • These two ASX shares have global growth plans
  • Lovisa is a global retailer of jewellery
  • City Chic is a retailer of clothes, footwear and accessories

There are plenty of ASX shares focused purely on the domestic economy.

Names like Commonwealth Bank of Australia (ASX: CBA), Woolworths Group Ltd (ASX: WOW) and Telstra Corporation Ltd (ASX: TLS) earn most of their profit from Australia.

But some businesses make a significant amount overseas and plan to bring in even more earnings from international sources.

Here are two ASX shares with global growth intentions.

Lovisa Holdings Ltd (ASX: LOV)

Lovisa is a retailer of affordable jewellery, mainly targeted at a younger audience.

It is liked by multiple brokers, including Macquarie, which rates it as a buy with a price target of $24.90. That implies a potential rise in the Lovisa share price of almost 40% over the next year.

The broker noted the growth of store numbers, sales and margins, with ongoing growth in the second half of the 2022 financial year.

In the first half, the ASX share opened 42 new stores, amounting to 586 at the end of the period. Total revenue rose 48.3% to $217.8 million, while the gross profit increased 50.5% to $170.7 million. Net profit after tax (NPAT) increased 70.3% to $36.7 million.

The ASX growth share has more than 20 stores in Australia, New Zealand, Malaysia, South Africa, the United Kingdom, France, Germany, the United States, and the Middle East. It entered two new markets during the period – Cyprus and Lebanon.

The US is already its second-largest store network. It opened 18 new stores in the US during the period, now trading across 19 states.

In the first eight weeks of the second half of FY22, total sales were up 61.7% year on year.

Despite that, the Lovisa share price is down 10% since the start of the year.

On Macquarie's numbers, the Lovisa share price is valued at around 30x FY23's estimated earnings.

City Chic Collective Ltd (ASX: CCX)

City Chic is a leading retailer of plus-size clothing, footwear and accessories for women.

In Australia, it has a national network of City Chic stores. But, it also has several other brands in different markets. For example, in the US, it operates the Avenue website. In the UK, it operates the Evans website. Also in the northern hemisphere, it has a number of partnerships where its products are sold through other retailers.

The City Chic share price has been smashed in 2022, down around 40% since the start of the year.

Many brokers rate this ASX growth share as a buy, including Ord Minnett. The price target from this broker is $5.20, a potential rise of around 60% over the next year if the broker ends up being right.

The broker noted the high level of sales growth in the first six months of FY22, despite the impacts caused by COVID-19, including lost store trading doors and other factors.

In HY22, sales revenue rose by 49.8% to $178.3 million. Despite all of the negative impacts in this result, and the $10 million of COVID-related "austerity measures" in the prior period, it increased underlying earnings before interest, tax, depreciation and amortisation (EBITDA) by 1% to $23.5 million.

At the start of the second half of FY22, the ASX share continued to deliver revenue growth. It reported momentum building in the US, UK and Europe. City Chic said that it's also developing new programs, launching new ranges with existing partners, and onboarding new partnerships.

According to Ord Minnett, the City Chic share price is valued at 19x FY23's estimated earnings.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Lovisa Holdings Ltd and Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Retail Shares

Two happy woman on a couch looking at a tablet.
Retail Shares

Ka-ching! 5 fastest growing ASX 200 retail shares of FY25

After strong share price growth, do brokers think these ASX 200 retail stocks have more room to run?

Read more »

Woman thinking in a supermarket.
Retail Shares

Coles vs Woolworths shares: which is the best buy?

Competition in Australia's supermarket sector will heat up further.

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
Retail Shares

Are Lovisa shares overvalued?

Has the fast fashion retailer already peaked this year?

Read more »

A woman looks at a tablet device while in the aisles of a hardware style store amid stacked boxes on shelves representing Bunnings and the Wesfarmers share price
Retail Shares

Is the Wesfarmers share price a buy for passive income?

Does this stock enough on the income side of things to be appealing?

Read more »

a thoughtful shopper with shopping bags wearing sparkly gold dress and matching shoes reclines on a chair with hand to chin in thought.
Retail Shares

ASX retail stock down 92% in 16 months faces 'challenging outlook': expert

It's been a big fall from grace for this ASX retail stock after being the fastest riser of the All…

Read more »

A warehouse worker is standing next to a shelf and using a digital tablet.
Retail Shares

The pros and cons of buying Wesfarmers shares this month

There’s a lot to think about with this impressive retail giant…

Read more »

a woman wearing fashionable clothes and jewellery checks her phone with a satisfied smile on her face in a luxurous home setting.
Retail Shares

Why I think this ASX small-cap stock is a bargain at $7.85

I think this small company has big potential.

Read more »

A happy young couple celebrate a win by jumping high above their new sofa.
Retail Shares

Overinvested in Wesfarmers shares? Here are two alternative ASX retail stocks

These stocks could complement an investment in Wesfarmers.

Read more »