Lovisa Holdings: A Five-Year Growth Story Emerging

We are becoming more comfortable that Lovisa could become a five-year growth story, based on the disciplined and strategic manner in which offshore growth opportunities are being evaluated. With the Lovisa product culturally attuned to UK tastes, expansion into the UK market may present a logical short to medium term opportunity, with US and Japan markets providing subsequent medium to long-term opportunities. The scale of the UK opportunity is highlighted by the dominant player in the costume jewellery segment, Accessorize, which owns around 250 stores. Performance within Lovisa's existing markets is good, with like for like growth in all regions they operate in. The company also reported margin expansion despite currency headwinds, which highlights the strength of management. Dividend yield in FY16 is estimated at 4.1%, which is particularly attractive given growth optionality. Full research here: (VIEW LINK)


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