LOV reported missed expectations when they February, here, and will be out with FY26 results on the 26th August.
Positives
- LOV has basically no exposure to housing or AI headwinds.
- LOV is most exposed to the younger generation whose spending patterns are faring better than those saddled with rent and mortgages.
- The stock is trading ~20% below its long-term valuation.
Negatives
- LOV is still priced for growth, which is going to get increasingly harder to achieve.
- This jewellery retailer may be cheap compared to recent years, but comparable store sales growth has been decelerating.
- Competition is increasing for this high-margin business.
- Sentiment is likely to remain subdued until the company can demonstrate it justifies a P/E of 23x.
LOV operates in a “safer” corner of retail than JBH and HVN, but as competition increases, risks are increasing about whether new store openings can continue to offset softening like-for-like performance across its outlets.
- We wouldn’t be surprised to see LOV test below $19 in 2026.
MM is neutral/negative towards LOV around $24
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