Why fund managers are split on Lovisa Holdings' Jewells expansion
Lovisa Holdings' aggressive global store rollout continues, but a slowdown in comparable sales and losses at its new Jewells brand have divided fund manager opinion.
17 Jul 2026 · 6 min read
In short
Lovisa Holdings' comparable store sales decelerated from 3.5% to 1.6% in its first-half FY26 result, even as total revenue rose 23%.
The company's upmarket Jewells brand recorded a bigger EBIT loss than analysts expected, raising questions about the near-term cost of the rollout.
Founder and major shareholder Brett Blundy added to his stake, worth more than $900 million, in March 2026 after 11 years and 3 months as a holder.
Fast fashion jewellery retailer Lovisa Holdings continues an aggressive global store rollout even as its first-half FY26 result disappointed the market, with ECP Asset Management's February 2026 Monthly Report detailing total revenue up 23% but comparable store sales decelerating from 3.5% to 1.6%, alongside a bigger-than-expected EBIT loss from its upmarket sister brand, Jewells.
A proven store format facing new competitive and format risks
Maple-Brown Abbott's October 2025 Article set out the bear case in detail, flagging three specific concerns: the departure of a highly regarded former CEO who drove much of the recent growth, emerging competition in key markets including Australia and Asia that appeared to be slowing the store rollout pace, and the launch of the higher-end Jewells format, which the manager questioned as a distraction from a core business that already had abundant growth opportunities, at a valuation of over 40 times earnings, two to three times most other retailers. Auscap Asset Management's March 2026 Article offered a contrasting view, noting Lovisa's approximately 80% gross margins and higher return on equity than peer Nick Scali, with management describing the global rollout story as strong as it has ever been.
Management is saying that the rollout story for Lovisa across the world is as strong as it's ever been and that's really what drives the economics of the business.
— Auscap Asset Management, Article, March 2026
QVG Capital's September 2025 Monthly Report detailed a specific catalyst that had briefly boosted sentiment before fading: the prospect of Lovisa picking up store leases from the administration of key global rival Claire's had dimmed considerably, coinciding with new store openings running below the pace required to hit market expectations. Auscap Asset Management's March 2026 report noted Lovisa remains well placed to capitalise on the ongoing collapse of Claire's regardless, given its own global rollout momentum. Founder and major shareholder Brett Blundy added to his stake, worth more than $900 million, in March 2026 after 11 years and 3 months as a holder, a signal of continued insider conviction even as some institutional managers reduced exposure.
What managers are watching next
LSN Capital Partners' March 2026 Monthly Report detailed exiting the position entirely as part of a broader reduction in consumer discretionary exposure to reflect a more cautious near-term backdrop, in contrast to Lennox Capital Partners' February 2026 Presentation, which topped up its holding specifically on the valuation upside it saw following the sell-off. With ECP Asset Management flagging the central near-term question as whether new store productivity can offset margin pressure from higher-than-anticipated promotional and development costs, particularly around the Jewells rollout, the trajectory of that startup brand's losses remains the key swing factor for the stock.
Questions
Why did Lovisa Holdings' share price fall in early 2026?
Lovisa Holdings' comparable store sales decelerated from 3.5% to 1.6% in its first-half FY26 result, and its upmarket Jewells brand recorded a larger-than-expected EBIT loss, disappointing a market that had priced in continued strong momentum.
Why are some fund managers cautious on Lovisa Holdings' Jewells brand?
Maple-Brown Abbott questions why Lovisa Holdings would distract management and allocate capital to a new higher-end format like Jewells when its core store format already offers abundant global growth opportunities, viewing it as a potential warning sign about the core business's remaining runway.
Is Lovisa Holdings benefiting from Claire's collapse?
Auscap Asset Management believes Lovisa Holdings is well placed to capitalise on the ongoing collapse of global rival Claire's, though QVG Capital notes the prospect of directly picking up Claire's store leases had dimmed considerably by late 2025.
21 managers, 52 comments, with each manager's latest recorded position.
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