Slow retail dulls Lovisa’s growth
SHARES in budget jewellery chain Lovisa have tumbled nearly 19 per cent after the retailer said its same-store sales growth so far in the current financial year had turned negative.
Chief executive Shane Fallscheer told shareholders yesterday comparative sales for the year-to-date were down 0.9 per cent, far lower than the long term target of a 3-5 per cent increase.
He attributed some of the blame on strong comparative sales growth over the past few years, saying “as a result, comparative sales in the current year will be more challenging as we cycle these strong numbers.”
Lovisa shares fell to $6.85.
While the company remained upbeat on its international expansion plans, it indicated there was pressure in the domestic market as consumers reduce spending.
“In Australia, households are affected by rising power prices, low wage growth, rising mortgage rates and deflating property prices in most major cities. Uncertainty abounds,” chairman Michael Kay told shareholders at the company’s annual general meeting.
Despite this, the overall result for 2018/19 will depend on its performance in the period leading into Christmas, he said, adding that the management team remains acutely focused on ensuring strong gross margins and well-managed costs. Lovisa, which has stores at Cairns Central and Stockland Cairns shopping centres, is reducing its reliance on Australian sales as its international expansion gathers pace, Mr Kay said.
IN AUSTRALIA, HOUSEHOLDS ARE AFFECTED BY RISING POWER PRICES, LOW WAGE GROWTH, RISING MORTGAGE RATES AND DEFLATING PROPERTY PRICES IN MOST MAJOR CITIES