Thank you. Good morning everyone and thank you for taking the time to dial in today. On the call today you have our Executive Deputy Chairman Mark McInnes, our Group CFO Chris Lauder, and myself John Robert Cheston, Global CEO. As you're aware, this morning we published our full year results to the ASX and we would like to talk you through them now. I will now do a page turn to go through the highlights of the presentation and we are happy to take questions at the end. If we start by turning to page four, we will talk through some of the highlights of the year. I am pleased today to present another solid result for the FY 2024 year, which is again evidence of the strength in the team, the product, and the potential of the business.
Our store rollout continued throughout the year, gaining strong momentum in the second half, opening 162 new stores for the financial year, taking the store network to 1,031 stores at financial year end. This allowed us to deliver solid growth in total sales of 14.2%, which included comparable store sales up 1.7% on the prior year. Gross margin was again a highlight, offsetting the impact of upward pressure on cost of doing business as we continue to make investments into growing the business. As a result, we delivered an EBIT of AUD 138.7 million, up 8.2%, and an NPAT of AUD 86.3 million, up 4.8%, which has allowed the Board to announce a final dividend of AUD 0.27 to be paid in October. If we turn to page six, you can see the sales performance of the period that shows the benefits of our continued store network expansion.
Looking to our regions, growth was again strong in the European and Americas markets, with those regions providing the majority of new store growth. The Asian region continues to be the most challenging market and opportunity for improvement through a renewed focus on operational excellence. I'll now hand over to Chris Lauder, our CFO, to talk through our financials.
Thanks John.
Morning all. If we turn to page 7, gross profit was AUD 654.7 million at an 82% gross margin, up on last year by 100 basis points, which was achieved on top of the 110 basis point increase achieved in FY 2024 and 310 basis points higher than FY 2022. This result has been delivered from tight management of pricing and promotion and our focus on keeping our inventory healthy, as well as improved performance in management of shrinkage across the business. We continue to focus on the efficiency of our inventory position and are very pleased that we have been able to close the financial year in a good state. Turning to page 8, I'll talk to.
Our profit, as you can see, we.
Have again been able to deliver growth in both EBIT and NPAT despite investment into the business impacting on our cost base. We continue our ongoing investment into service and management structures, technology, supply chain, and digital marketing and events to support our constantly growing business.
The upward pressure on our cost of.
Doing business was offset by the reduction in the CEO LPI expense from AUD 11.9 million in the prior year to AUD 2.1 million in the current year. As a result of all this, NPAT was up 4.8% compared to FY 2024 with higher interest expense on store leases having an impact as a result of the ramp up in new store openings in the second half. Turning to page nine, you'll see that cash generated by the business has again been solid, with cash from operations before interest and tax of AUD 243 million for the year, reflecting tight management of our working capital. Cash capital expenditure for the period was AUD 55 million, predominantly from new store fit-outs as well as store refurbishments.
Investment into support technology.
Cash interest and lease payments were also higher than prior year due to the growth in the store network and higher borrowings and interest rates. Turning to page 10, you will see that the balance sheet remains strong with a clean inventory position and significant liquidity available to fund growth. Solid profit result for the period and continued strong cash flow and balance sheet.
Position has allowed the Board to announce.
An unfranked final dividend of AUD 0.27 per share, taking full year dividends to AUD 0.77, representing the distribution of surplus cash currently.
In the business, and whilst this is.
Lower than last year, it reflects distribution of 100% of earnings following higher payouts in recent years as we distributed surplus cash.
As we've said previously, the Board will.
Continue to assess dividend levels each period end and determine the appropriate level of dividend based on profitability, cash flows, and future growth capital expenditure requirements in the context of prevailing economic conditions.
The Board do not currently have a.
Specific dividend payout ratio, and will continue to base dividends on the cash flow needs of the company and the structure of the balance sheet.
I'll now hand back to John.
Thank you, Chris. If we turn to page 11, a quick update on store numbers: the key driver of future growth for Lovisa continues to be our global store rollout. We finished the period with 1,031 stores trading in over 50 markets, with 162 new stores open for the financial year. Although the pace of rollout was slower than prior years in the first half, we remained focused on continuing to grow the store network globally, and we were pleased that we were able to deliver a significant acceleration in the pace of rollout throughout the second half. The strong base we have built in the European market allowed that market to deliver the largest share of new store growth for the period, with 86 new stores, and provides us with a very strong base to continue to expand from.
In the Americas region, we were able to make good progress in our Canadian store rollout, now trading from 32 stores in that market. U.S. store openings were also able to regain momentum, with 23 new stores opened. We were also able to open one new company-owned market for the financial year, with our first store in Zambia open in the second half, and we also opened three new franchisee markets in the Ivory Coast, the Republic of Congo, and Panama. Turning to page 12, you will see some images of our latest store fit-out concept called Series 5. This concept is designed to give a more refined and elevated feel to our stores and adds a new piercing studio store-in-store element along with digital screens.
This concept will become the basis for new stores and refurbishments over the coming year and will provide an enhanced shopping experience for our customers. Turning to page 14, you can see a recap of the business strategy, which sets out the keys to our success to date and our focus for the future. Our strategy is unchanged. We continue to be focused on the global expansion of our physical and digital store network. As you've already heard, we have made strong progress in delivering on this strategy during the current financial year and have laid solid foundations for continued growth in the future. We have continued our ongoing investment in customer experience, support systems, and supply chain with the opening of our new 5,000 square meter U.S.A. warehouse in August 2024, which is now successfully servicing more than 250 stores in the Americas region.
We have also invested during the period in enhancing our customer engagement through social media and events, with a number of influencer events and piercing parties held in key locations around the world during the period. We remain excited about the future and believe significant opportunity exists for continued future growth. On page 15, I will talk to the trading update for FY 2026 to date. Trading for the first eight weeks of FY 2026 saw comparable store sales for this period up 5.6% and total sales up 28% on the same period in FY 2025. Since the end of the financial year, we have opened 16 new stores with 6 store closures, with total store count at 1,041 stores, and expect a single store rollout momentum to continue.
We continue to focus on opportunities for expanding both our physical and digital store network, and our balance sheet remains strong with available cash and debt facilities supporting continued investment in growth. To summarize the financial year on Slide 16, our sales performance was solid for the period, with growth primarily from our network expansion, with Comp sales up 1.7% to deliver overall sales growth of 14.2%. Our global expansion delivered 162 new stores open in the period, finishing the financial year with a total network of 1,031 stores. Gross margins were again outstanding at 82%, an improvement of 100 basis points on prior year, which was achieved along with a clean inventory position. This combined to deliver good profit growth, with EBIT of AUD 138.7 million, up 8.2% on the prior year, and NPAT of AUD 86.3 million, up 4.8%.
With our strong cash flow and balance sheet position allowing the Board to announce a final dividend of AUD 0.27 per share to be paid in October, we are also very pleased to be able to announce the strong start to the new financial year, with Comp sales up 5.6% and total sales up 28% for FY 2026 to date. I want to thank the entire Global Lovisa team of over 7,000 employees for the outstanding work they are doing to deliver these results, and with that, I want to thank you for your time today and we are happy to take any questions you have.
Thank you. If you wish to ask a question, please press Star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press Star two. If you are using a speakerphone, please pick up the handset to ask your question. Our first question is from Aryan Norozi with Barrenjoey . Please go ahead.
Hi guys. Thank you.
Off just the first one for me in terms of the store rollout. Appreciate it's going to be lumpy. There's always going to be ups and downs, but in terms of just directionality, like in 2H 2025 you opened about 81.
Net new stores excluding tools.
You're annualizing at 160 stores at the moment. Is that annualized rate the way we should be thinking about sort of the business's capacity and run rate moving forward, or was there maybe some catch up in terms of stores in the second half that makes it hard to annualize, and so maybe it's a bit less than that? Any color will be appreciated, please.
Yeah.
Hey, Ari. As you know, we don't confirm or deny what your, what the store rollout numbers are. I think, you know, first half we were obviously a bit disappointed in the pace of rollout.
We said that we expected to ramp.
Up in the second half, which it did and more so towards Q4. We're far more comfortable with.
Where we've landed for the full year.
The pace in the first eight weeks is probably a little bit slower than that. As you said, it's lumpy and will vary over the course of the year. I think if you look at the FY 2025 full year outcome, we're much happier with that sort of level. It obviously depends on timing of when leases are executed and we get them signed off and manage to get the stores open.
Great, thanks. That's perfect.
On the cost growth, in second half 2025, your costs of doing business grew about 28% and your stores on average grew 12%. I won't bother asking about Joules integration costs because you probably won't say it, but I'll leave it to someone else. Even if you assume a few million dollars for that, it's a big step up in growth year on year. To what extent are those costs in the base? Moving forward, first of all, we have to annualize it and second of all, you grow it on that base or are there costs that will fall out of the business next year and these are maybe more temporary costs in the business?
Yeah, I think you're right. We're not going to be calling out any specifics on the Joules implementation costs, otherwise we would have put it in the announcement. It's a trial pilot just like any other new market. We don't call out specifics about it in terms of the underlying cost structure of the business. There was a lot of investment continuing in the second half in people structures.
In making sure that we've got the.
Right, both people and technology structures in place to continue to grow at the rate that we want to and support the much bigger business in over 50 markets around the world. There's a bit of IT spend in there where, you know, a lot.
Of that goes through OpEx these days.
Because everything's cloud-based, that's impacted on the cost structure.
A lot of that cost is.
Baked in, as you say. It will continue to annualize out.
When you're looking at the cost base.
Okay, so EBIT margins, despite your comp set of getting a bit better into 2026, your EBIT margins should still be falling into fiscal 2026 versus 2025. You did 17% EBIT margins this year. Given the annualization of that investment, is it fair to say the EBIT margins will probably continue to step down into 2026 and then it'll sort of do what it does based on comps?
Depends on your assumptions around store growth, store network growth and comps and the like, Ari. Obviously we want to manage CapEx, get that coming down as a percentage of sales, but we'll also continue to invest where we have to.
Thank you, John.
The next question is from Ed Woodgate with Jarden. Please go ahead.
Hi team.
Congratulations.
Good pro trading update.
Can you hear me okay?
Yeah, we can, Ed.
Thanks for that. Thanks for taking the question. Just wanted to ask on price increases. It looks like you put through some price increases there. Are there any other price increases you have? Can you give us some color quantitatively or qualitatively?
How are you thinking about that?
How that drove the trading update as well?
Yes, Edward, it's John. There were some modest, and I use the word modest, price increases in the Americas. As you know, we had the tariff situation which we had to deal with. They were implemented. We haven't seen price resistance from the consumer. Our business in the Americas is very, very buoyant, both at a comp sale and a total sale. Obviously, we reacted as necessary. They were very modest in nature.
Okay, that's possible. Just in relation to Joules, appreciate you not saying much and it hasn't been open for long, but are there any trends you can talk to there about how it's been received initially? If you don't want to speak about it at this point, we understand, but just put it on check.
I think, Ed, what we would say is the following.
The U.K. for us is a very, very strong market. In total, we opened 32 new stores, seven of which were the trial concept stores for Joules. Let's not forget about the 25 Lovisa stores that we opened. That is a very strong territory for us, a very strong geography for us. We're learning. The Joules proposition was only open the end of the first week of June. We opened seven stores. We're testing, we're learning, we're looking at the product proposition, we're looking at the services we provide, and we'll certainly update the market, of course.
Yeah, fair enough. Just given the context of.
The strong trading update and the strong.
Rollout, I just want to understand some of the puts and takes so we don't get too carried away. With the gross margins, that was a great result for the full year. It looks like, based on my back-of-the-envelope numbers, they were down 60 basis points for the second half, if I've got that right. Just be interested to understand how you're thinking about that into 2026, just in the context of the price rises. Any sort of color, that would be helpful.
Yeah, I mean I'm not sure whether you're looking at first half versus second half or second half on second half, but it probably doesn't matter too much year on year.
Yeah.
Yeah. I mean, gross margin generally has been on the improve over recent years and improved to a pretty high level. We're very happy with where it's at. At different points in time, we'll see that move. We obviously had in the second half some impact from tariffs in the U.S., and we put prices up to offset that. Obviously, that is gross profit dollars, not necessarily gross profit margin, so that can have an impact. Yeah, I think we're happy with where we're at with gross margin and how that will flow into F 2026.
Okay, awesome. Thanks, guys. Well done.
The next question is from Garth Francis with MST Marquee. Please go ahead.
Good morning, John, Chris and Mark. Thank you for taking my question.
Could you just give some color around the like for like sales principal 5.6% if that's constant currency or have you adjusted that with AUD to present that number to us?
That's constant currency we always report.
Terrific. The tax rate, it looks like that was 27% for the year. Is that sort of where you believe the blended tax rate for Lovisa is going to sit going forward, or can you just give us a sense of where you think that's going to land now with some of the changes in some of the foreign markets?
That's probably a little.
Bit lower than what we would normally.
Expect it to be.
I think if you look at all the different tax rates globally and average them out, it's a little bit higher than that. There are a couple of things in there that help to pull it down in terms of previous tax losses that we hadn't recognized that we got to utilize during the year. Yes, it's probably a little bit higher than that going forward, but we're happy to have a lower number this year.
Yeah.
We've chatted a bit on pricing. You can maybe just talk to the promotional environment and how promotional you've had to be. I mean obviously you mentioned that in your opening remarks, but are you seeing that you're having to go harder on certain lines just against the competitors that are in the market?
I wouldn't say specifically. I mean this business operates on four sales a year like most retailers. You know, a Christmas sale, a spring sale or autumn depending on which jurisdiction or geography you're in, and then a mid season sale and then an autumn or spring sale again depending if you're northern or southern hemisphere. We've always consistently stuck to four sales per year. We've always had a value proposition to attract customers into our stores, ostensibly at the front of the store. As Chris said, we've got strong margins.
We've had 100 basis points increase in margin, and I think that's testament to the strength of the product, the strength of the proposition which our team are buying for our customers and the response from the customers to it. Typically, you see an erosion in margin if customers are not happy with your product because you're having to mark things down and we're not seeing that. We're in good shape.
Terrific.
If I can, one last one just with Claire’s and the Federation in the U.S., is that going to potentially offer you some new opportunities in the U.S., or do you think it'll be more their shop-in-shop part of their business that's impacted?
It's not missed on us. It's definitely not missed on us. The situation of Claire’s in terms of, you know, Chapter 11 in the U.S. and also the bankruptcy in Europe. As you know, they trade from 17 markets, you know, North America, Canada in the U.S., and then 15 in Europe. We're in many of those markets, there's a couple we're not in. This is a significant opportunity. It's not being missed on us. We're across it, we know what we need to do, and we see it as an exciting opportunity for market share grab.
Thank you.
The next question is from Sean Xu with CLSA. Please go ahead.
Thanks team for taking my question. My first one just regarding again the trading update, that's a really strong like for like sales growth during the first eight weeks. Can we please get a bit more color on breakdown by regions and markets so we know a bit more insights on which market was driving the growth behind? Do you think you can maintain that rate of growth through to the end of the year, please?
Thank you.
Good. We don't break down our comps by market, sorry to say. Obviously, you can see how we traded the financial year in terms of total sales, but we've got breakdown by market there. That probably gives you a steer on where we're performing at our best. We're not breaking out the 5.6% but we are happy to be able to talk to a better comp number because it's been a lot lower than that for a while.
No worries. Understood.
Do you think that's sort of the rate you'll be aiming for towards the full year, FY 2026?
Let's put it this way. The second half saw an uptick in our comp. We were disappointed in the first half. The second half we had some good recovery and we were pleased with the second half performance. That momentum continued into the first eight weeks of the new fiscal year, and without giving guidance, we are pleased with our performance. We're in 50 countries. One of the great things about this business is we've got the natural hedge in 50 countries. As is always the case, some markets perform better than others. Some are on and some are off. The blend across those 50 countries, we're very, very encouraged with that positive start to the new fiscal year.
Gotcha. Thank you.
If I may ask another question around the tariff situation, is there any plan to, I guess, meaningfully diversify away from China to take advantage of southern tariff arbitrage that is moving to southern country with low tariffs? If that's a plan, I'll be curious to know if there's any capacity constraint or quality consideration that will limit how quickly these diversification can happen.
Thank you.
I mean, we already make a small percentage of our product in other markets beyond China. We're not totally dedicated and focused on China. We have got diversification in other countries. Don't also forget the opportunity we have with the economy of scale buying. The more products we buy, the more volume we buy, the more markets we open. We obviously have an opportunity with our vendors to secure better prices. At this stage we're happy with the blend of where we manufacture our products. Obviously it still is highly dominant on China, but we continue to grow in other territories as well.
Got it.
Thank you. Just a very last quick one from me. We've been hearing a lot about retail and supermarket these days about the retail crime and shrinkage issue. Things are particularly bad in Victoria. I'm curious to hear what you see locally, Australia and globally.
Please. Thank you.
I mean, it's interesting. Chris and I talked about this earlier this morning. We've made a lot of progress in terms of our shrink in our loss prevention, and we're pleased with the progress we're making in terms of lowering our number. Often, you know, loss prevention or shrink is systematic in terms of process breakdowns or issues that you can control yourself. We're not seeing this as an issue. We're focused on what we can do, what we need to do, what we can do to improve our shrink position. It's nothing of note that I would call out to you today that's causing us distress. Got it.
Thank you very much.
The next question is from Sam Teeger with Citi. Please go ahead.
Hi, guys. Good morning. When I'm looking at ANZ, sales per.
Average store seems like it's slightly going backwards.
I'm just wondering, are your store.
Refurb is going to be concentrated in.
And more generally, do you think.
The sales per store performance in ANZ is more of a function of emerging competition or maturity of the underlying concept?
I think, Sam, what we would acknowledge is we've deployed quite a lot of capital on new markets in terms of our expansion globally. I think we would all acknowledge there's an opportunity to renew some of our fleet over here in terms of the new Series 5 that we've shown images on in the deck. That's on us to choose to revisit those stores and to spend some capital on that. From our point of view, competitors come and go. We see competitors exit the market, we see new competitors come in. It's on us to make sure the product's right, the proposition, the price, and the marketing. We respect competitors, but there's nothing to see here. We focus on what we can do, but you'll definitely see a renewed kind of renewal of our fleet over in Australia and New Zealand. Sure.
The Series 5 does look good, much improved. How many refurbs did you do with them in 2025? How many are you planning to do in 2026? What's the average CapEx on each of these?
Thanks.
We don't call out the CapEx in terms of what we spend on the stores. What I would say is we've now trialed the Series 5 store concept in multiple markets across the world, and we've been very satisfied with the results that we're garnering from the investments in those new Series 5 stores.
Based on that, it's fair to say you'll accelerate the Series 5 rollout from here?
We'll accelerate our Series 5 rollout. When we look at a business case in a very methodical way, the size of the store, what the sales can take, the lease, the lease earn and so on and so forth, there's a number of factors that go into that. What I would say is we're pleased with the reaction that we've seen to our Series 5 stores and we've got evidence of those sales and those results across the world,
I think. Sam,
great.
Obviously, the refurbishment of a store often is tied to the lease renewal. You don't expect we're just going to go out and refurbish every store in the fleet because we've got a new Series 5 store concept.
It happens over a period of time, sure.
It is safe to say it'll be higher in 2026 and 2025, given the.
Trial has gone well.
John, last question.
Given you're new to the business and you come with a fresh perspective, what's your thoughts on the cost base?
The business, and do you have any?
Ideas in terms of how it can be optimized going forward?
I think what Chris talked to, which is important to notice, is that there's been investment in this business to drive sales aggressively and hard. We saw a significant upswing in the second half, and some of that was the benefit of the investment that was put into the business to drive store openings and to drive comparable store sales. We're particularly pleased with the acceleration in the first eight weeks of the new financial year. I think what this business has done very well is invested capital in systems, in people, in infrastructure to make sure we're set to continue the rollout of the stores. I look at it as an opportunity to leverage now, Sam, to leverage the investment that's been put into this business to accelerate in terms of store openings across the globe. Great.
Thank you very much.
The next question is from Chami Ratnapala with Bell Potter Securities. Please go ahead.
Thank you.
Morning, team. Welcome, John, and hi, Chris and Mark. Thanks for taking my questions. Firstly, a solid result today. Two questions from me. I think quite a bit was answered into the questions on Joules and Claire’s. Firstly, what's the timing on maybe Joules going global? Are you willing to sort of talk about it? With Claire’s Chapter 11, will that be expedited given that you know where opportunity lies and you have a good read across?
Thank you. I mean we're an entrepreneurial business and doing a strategic trial of Joules in the U.K. is really what it is. It's a trial, it's a test and learn. It's to see how the consumer's reacting to the proposition both in terms of price, products, services that we offer, the store design. We're really not in a position to make a statement or forecast in terms of how many stores and when and which countries. We're not in that position. What we do efficiently and robustly is we monitor the sales, we monitor the return on the investment. That was the capital we injected to date. When we're ready to talk about Joules we'll do so.
I need you to look if you could as a trial and we're learning every day with regards to Claire’s, you know, we monitor the information that comes through both from the press and also from the market on a daily basis. We're across it, we're diligent with the work we're given to that opportunity and if there's something to share with you, we'll share it with you. We think it's an exciting opportunity. It's a market share grab opportunity for us. Piercing is a good opportunity for us because they're a big operation in the piercing space. I would urge you just to watch this space but to be confident that we're across the opportunity and we're alive to it.
Just to add to John's comment on that, I think it's true to say we.
Know by country, by shopping centre, every.
Claire’s store where we’re co-located and what the opportunity is. We already know that today.
I think John is giving you a good flavor of organizationally and globally we see this as an opportunity.
Thank you very much. Maybe on the digital side, you did see a bit at a high level. Anything on, sort of, you know, would digital be expedited? Any initiatives to call out?
We're focused really on, as you can see at the moment, we're putting a lot of capital and a lot of investments in terms of bricks and mortar. We are a strong bricks and mortar trader. As we know, our average selling price and our units for transaction are what they are. We're a big supporter in bricks and mortar. Along that, we are committed to omnichannel in terms of e-commerce, both in terms of the initiatives we're driving. They coexist. You can't have a retail business today without both. We'll continue to invest, you know, in the right way for e-commerce and omnichannel. Really, this is a strong network of bricks and mortar stores. You've seen that in terms of the 162 stores that we've opened last year and the 16 stores that we've already opened in this first eight weeks.
Perfect.
Thanks for that. The last one from me is on just the regional performance. I mean, great to see the outperformance both in the U.S. and Europe, you know, versus sort of the Asia on the other side. Would you call out that U.S. is your sort of best performing region at the moment or how do you view that versus Europe?
I mean, we don't specifically call out which is the best market, which is the one we're happy with. I mean, you've seen from the slides, we've put the thoughts of the metal in terms of openings in Europe and in the Americas. We've got a significant presence now in Canada. We've got a phenomenal presence now across the United States of America. We're also a very, very strong presence in Europe. We've opened stores in Ireland, which have been performing well. We've got more stores open, more stores now in the United Kingdom. I think it's important. This is one of the, I think the great thing about this business is one of Australia's retailers that has really gone on a global journey, the 50 countries and then we've got the franchise countries on top of that.
We've been able to take this wonderful business on a global journey and we're reaping the benefits of that. We've had a strong start to the new financial year. We don't call out particularly a market. You can take it as read the fact that we're happy with the performance the first eight weeks of the new fiscal year.
Thank you very much, and all the best.
Thank you.
The next question is from John Campbell with Jefferies. Please go.
Hi guys.
Thanks for taking the question. You've obviously covered a lot of ground, and you've talked a little bit about sort of competitive dynamics, I guess, both online and offline, and referenced Claire’s ones.
Could you just maybe give a.
Little bit, particularly John, given you're relatively new.
New to the space, could you just.
Give a little bit more color on what you're seeing in terms of the competitive dynamic across the globe. Obviously, you've got a very successful retail format and whether you're seeing some of your direct bricks and mortar competitors aggressively roll out as you are, and also potentially whether you've talked a little bit about e-commerce, but whether you're seeing any sort of step up in e-commerce. I know there's a lot of product that's sold online around the world, but anything noticeable from your end in terms of that competitive dynamic that you might call out.
Mark and I have been doing this a long time, 40 or 50 years. Competitors come and competitors go. If you get too caught up on what's happening to the competitors, you don't focus on your day job and what you get paid to do. We respect competitors in all markets. Do we look at them, do we visit them? Do we look at their proposition, price, the product, the range, the quality, the service? Of course we do. We got to stick to our knitting and focus on what we can do and what we can do well. We observe the competitors around the world, but there's nothing we're seeing at the moment that is causing us concern. The opposite in terms of Claire’s. That's a wonderful opportunity for our shareholders.
We know, as Mark said, where they trade the stores, the size of the store, where they've got two stores in a location. This is a wonderful opportunity and one that we're taking very seriously.
Adding to John's answer, I.
Both John and I come from a deep product background, and we absolutely know that if you focus on the customer and what the customer needs in terms of product, that will drive incredible results. I think you should know that that's a key focus of ours.
Yeah, great, thanks for that. Could I follow on, just on the e-commerce front, and again you've briefly mentioned it, but are your e-commerce sales growing at a much faster rate than the totality of the growth in your bricks and mortar sales, or is it really still a fairly small component of the totality of sales?
I think, let me answer it in a slightly different way, but I'll answer your question, it's in a slightly different way. We're focused on comparable store sales growth and top line sales growth, and we know the levers. We are absolutely confident we know the levers to deliver what our shareholders expect, and we will pivot between what we need to do in terms of bricks and mortar and online. I would like you to have confidence in the fact we know what we need to do in both channels.
Okay, so you still see e-commerce as a worthy channel to pursue.
Hard omnichannel is never going to go away for retailers. You can't exist today without an online platform and an online capability and a bricks and mortar capability. This business has a wonderful opportunity, full stop. As you've seen, our focus has really been on the 162 stores that we've just opened in the last financial year, particularly as Chris said earlier, the acceleration in the second half. We opened a third of the new stores in the first half and two thirds in the second half. We're excited on what's coming out of those store openings.
Right.
Thanks for that,
pleasure.
The next question is from Chenny Wang with Morgan Stanley. Please go ahead.
Hi guys. Thanks for taking my question. Maybe just on China first, it appears that the second store was opened in the.
Second half after, you know, being out.
One for some time. Yeah.
Any thoughts on how you think about that market going forward?
Would be great.
I mean, I can talk firsthand because I was up in China two weeks ago, so I can talk firsthand. China is not an easy market. I mean, we know this from a lot of international players who are trying to refine and work through their model. There are many big operators who have closed a lot of stores in the entities. Companies have closed many, many stores in China. All we're doing, and I reiterate what I've said about Joules earlier, this is a test and learn. We opened one store in southern China. We've opened the second store in Beijing in North China.
Forgive me for being repetitive, but what we're doing here is we're looking at how the consumer is reacting to our product, to our price, to our profiles of our earrings, the drop of the earrings, to the length of the necklaces we sell. Before we commit to that market in earnest and deploy capital, we're just testing and learning. I was there, I gave it my attention a couple of weeks ago. Let's not kid ourselves. It's a pretty challenged market over there in terms of the consumer. We're in the business of opening stores where they are profit accretive and we can generate significant returns. We're keeping it in view. We're not saying China's not going to be an opportunity, but we're cautiously learning, testing and understanding the market and just adding to that, we still see a.
Significant runway in the U.S. and Canada.
In European countries, I think it's been John's absolute focus since joining, focusing the organization on where those biggest opportunities lie in the next one, two, and three years. Certainly, those parts of the world represent the biggest opportunity.
Got it. Thanks guys.
Once again, if you wish to ask a question, please press Star one on your telephone and wait for your name to be announced. The next question is from Alan Franklin with Canaccord Genuity. Please go ahead.
Good morning, guys. Thanks for your time. Just wanted to reframe a couple of questions early on cost growth, please. Could you maybe just give a bit of detail on the pace of employee growth through the period, and if you can, to the extent of what the employee count was in December 2024 versus June 2025?
Yeah, I mean we don't give out employee count numbers to that level of detail. Obviously the headcount increases as we.
Roll out more stores.
In Q4, we opened a lot of stores. Obviously, we need teams in place.
To trade those stores.
Some of the markets that we've opened in have got higher still wage costs per employee, so that pushes it up.
The objective there is.
To manage that as a percentage of sales support wise, we've definitely invested in more headcount, some senior people to help run the much larger business, and just the ongoing investment that we do and that we've been talking about for a long time where, you know, we know that we need to continue to invest and, you know, when we think we've got enough structure in place to run the business, then we have to keep going because we keep opening more stores. It's an ongoing piece of work.
Sure.
In the other expenses bucket, I think there's another other bucket that accounted for AUD 15 million of the increase of AUD 26 million. Can you provide a bit of detail of what's in there? I don't think it was a material change of the first half. It feels like a lot of that's.
Coming into the second half.
That's called other because it's full of a lot of other, obviously. There's a lot of different things in there that are rolling up to those numbers. What's included in there are things like marketing investments, where we've invested more into digital marketing and events and all those other things that we've called out. There are some of the setup costs of.
Joules are in there.
There are a few other things in there that I'm just trying to remember what they are.
But.
Yeah, it's sort of a number that probably stays in as we move forward. It's a different way to frame it generally.
Absolutely.
There's no.
There's not.
A lot of lumpy one-off things in there that are going to reverse in FY 2026. Largely, you could assume that's baked.
Into the cost structure.
No problem. I'll leave it at that. Thanks.
There are no further questions at this time. I'll now hand it back to Mr. Cheston for any closing remarks.
Thank you. Firstly and most importantly, I appreciate you all dialing in to ask questions and to listen. We've said what we've said. We're encouraged. With the start of the new financial year, I think the comp sales growth are very encouraging and the top line growth of 28% is very encouraging. We know the markets where we've got the opportunity. We know what we need to do and we're at it. We appreciate your time and your support and we wish you a good day.
That does conclude our conference for today. Thank you for participating. You may now disconnect.