Lovisa Holdings Limited (LOV) is a global, fast-fashion jewellery retailer which offers affordable fashion jewellery in a small-format store (~50-100sqm). We love their business model and have owned the stock in the past, selling above $24 in November last year. Shares were down -6.9% yesterday as the Retail Sector appeared to experience some profit-taking. We like how LOV has grown since COVID but we believe this will be hard to match over the next few years, their young consumer is at least relatively insulated from the likes of rising interest rates & day to day costs of living.
- We can see LOV challenging the $20 area as the economic fragility weighs on margins and growth becomes harder bringing into question its 31x valuation for FY23.
MM is neutral LOV around $22.
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