Lovisa Holdings Shares Reclaim Key Moving Average as Momentum Flips

Lovisa Holdings shares (ASX: LOV) have clawed back the bulk of last week’s sharp pullback, with LOV closing 2.31% higher at A$24.40 on Tuesday to recapture the technically significant 200 day SMA in the process. The move is the third consecutive positive session, following a 9.15% drawdown on October 8.

That selloff was triggered by the announcement that Group Chief Financial Officer Chris Lauder had tendered his resignation after nine years with the company, covered here at the time. The speed of the subsequent recovery suggests that the initial reaction was overdone, a suggestion put forward by our team following the move. The fact that buyers stepped in decisively across three consecutive sessions to reclaim the 200 day SMA adds weight to the view that the selloff created a short-term buying opportunity rather than a structural shift.

The Latest Financials

Lovisa’s FY26 full-year results, showed revenue climbing 17.6% year-on-year to A$938.8 million, with earnings before interest and tax rising 14.1% to A$158.2 million. Net profit after tax grew 10.7% to A$95.6 million, while gross margins expanded 60 basis points to 82.6%. Operating cash flow surged 21.0% to A$294.5 million, leaving the company in a net cash position of A$46.7 million. That cash generation is significant because it fully funds both the company’s aggressive global store rollout and its dividend commitments, without requiring external financing.

The CFO departure itself, while jarring in isolation, has been structured to minimise operational disruption. Lauder will serve a full six-month notice period through to April 7, 2027, during which Lovisa’s Board will conduct a global search for his successor. The extended handover window means financial reporting cycles, internal controls, and capital expenditure planning for new store openings are expected to proceed without interruption. Lovisa’s regional finance teams also remain intact, providing operational continuity beneath the group CFO level.

That said, the resignation does not exist in a vacuum. It follows the earlier transition at the CEO level, with Global CEO John Cheston having come on board in mid-2025. Back-to-back C-suite changes at a company executing a high-velocity international expansion naturally attract scrutiny, and the market’s initial reaction was not entirely without basis. Execution risk is a legitimate concern when a business is simultaneously scaling across multiple geographies, managing foreign exchange exposure on Asian-sourced inventory, and navigating a shifting tariff environment.

What Next

From a technical standpoint, trading above the long term moving average is an encouraging sign that the medium-term trend remains intact. The upcoming annual general meeting is also expected to provide a trading update, which will be scrutinised for any signs that the strong early FY27 sales momentum has continued into the back half of the first quarter. If constant currency sales growth remains in the mid-teens range, it would reinforce the view that the business is operating well beneath the surface-level noise.

With the LOV share price continuing to trade 35% lower over the past year, momentum has proved stubborn to shift. A breakout above the range at A$25 would be a meaningful indicator that not only has the leadership move been digested, but that buyers are getting ready to step in and challenge overhead resistance.