Lovisa Stock

Thank you for standing by, and welcome to the Lovisa Holdings Limited FY '26 Full Year Results Briefing. [Operator Instructions] And finally, I would like to advise all participants that this call is being recorded.

I'd now like to welcome John Cheston, Global CEO, to begin the presentation. John, over to you.

Many thanks, Paulie. 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 Cheston, Global CEO. As you are aware, this morning, we published our full year results to the ASX, and we would like to talk you through them now. I'll do a page turn through the highlights of the presentation, and we're happy to take questions at the end.

If we firstly turn to Page 3, we will talk through some of the highlights of the year. I'm pleased today to present another strong result for FY '26. Our store rollout maintained the momentum built in the first half, opening 75 new stores in the second half to take the full year count to 160 new stores opened and now taking store network to 1,136 stores at financial year-end. This allowed us to deliver growth in total sales of 17.6%, which included comparable store sales up 2% on prior year. A highlight of this performance was the delivery of close to 30% growth in both the Americas and European markets, reflecting the focus on growing these markets with quality stores. Our gross margin continued its consistent growth, up 60 basis points to 82.6%. We continue to invest in the cost structure of the business to support ongoing growth in stores and online, with all of this combining to deliver EBIT of $158.2 million, up 14.1% and NPAT of $95.6 million, up 10.7% which has allowed the Board to announce an increased final dividend of $0.33, up 22% on prior year to be paid in October.

As you will all know, we opened first trial stores of our potential new global brand Jewells in the U.K. in June last year. And the results of the Jewells business are included in the reported FY '26 results for the full period in the current year that I just noted, and we will talk to further today. As Jewells continues to be in its start-up phase, we will not specifically be talking about its performance as part of today's results. However, its impact is included in the numbers we will be talking to.

If we turn to Page 5, you can see the sales performance for the period that shows the benefits of our continued store network expansion with consistent sales growth over a number of years. Looking to our regions, growth was once again strong in the European and Americas markets at close to 30% for each market for the financial year, with those regions continuing to provide consistent new store growth. The APAC regions continue to be our biggest opportunity through a renewed focus on operational excellence with structural changes to our operations team in place and now starting to deliver benefits.

I'd now like to hand over to Chris Lauder, our CFO, to talk through our financials. Thanks, Chris.

Thanks, John. Good morning, all. If we turn to Page 6, gross profit was $775.3 million at an 82.6% gross margin, up on last year by 60 basis points and represents a continuation of the strong year-on-year margin growth we've seen over a sustained period with 270 basis points of improvement since FY '23 alone. This result has been delivered from our continued focus on sourcing, ongoing promotional efficiency and improved shrinkage. We continue to focus on the efficiency of our inventory position and are very pleased that we've been able to maintain our inventory in a good state.

Turning to Page 7, I'll talk about profit. As you can see, we've again been able to deliver strong growth in profit, continuing the consistent trend over a number of years while continuing to invest into the business with a focus on service and management structures, technology and supply chain to support our constantly growing business, while at the same time, also being able to invest in the start-up phase of the Jewells business.

Turning to Page 8, you'll see that the cash generated by the business has again been a highlight with cash from operations before interest and tax of $294.5 million for the financial year, up 21%, reflecting tight management of our working capital and the continuing operational strength of the business. Cash capital expenditure for the period was $58.5 million, predominantly for new store fit-outs as well as store refurbishments and investment into support technology. Cash interest and lease payments were also higher than prior year due to the growth in the store network.

Turning to Page 9. You will see that the balance sheet remains strong with a clean inventory position and significant liquidity available to fund growth. The strong profit result for the period and continued strong cash flow and balance sheet position has allowed the Board to announce a final dividend of $0.33 per share, up 22% on prior year, taking full year dividends to $0.86 and representing the distribution of 100% of earnings for the financial year.

I'll now hand back to John.

Thank you, Chris. So if we turn to Page 10, a quick update on store numbers. The key driver of future growth for Lovisa continues to be in our global store rollout. We finished the financial year with 1,136 stores, trading in over 50 markets with 160 new stores opened in the financial year. We remain focused on continuing to grow the store network globally, and we're pleased that we're able to maintain the momentum from the first half through the second half of FY '26.

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 76 new stores, including 34 in the United Kingdom and 20 in Germany and provides us with a very strong base to continue to expand from. In the Americas region, we were able to continue the momentum in our U.S. and Canadian store rollout with 44 new stores opened in the Americas during the period. We were also able to open 6 new franchisee markets in Réunion, Mauritius, Ghana, Kenya, Burkina Faso and Iraq.

Turning to Pages 11 through 16. You will see some images of our latest store fit-out concept, which we call Series 5, which we have continued to roll out to new and refurbished stores around the world. This concept is designed to give a more refined and elevated feel to our stores and adds a new Piercing Studio store in store concept, along with new elements such as digital screens. To date, we have opened 53 stores under this concept with a strong pipeline of further investment in store look and feel coming for FY '27.

On Page 17, I will talk to the trading update for the first 8 weeks of FY '27. Trading for the first 8 weeks of the new financial year saw total sales on a constant currency basis up 16.4% on the same period in FY '26, with comparable store sales for this period up plus 3% and showing an improving momentum through the month of August. We continue to focus on opportunities for expanding both our physical and digital store network with a long new store runway supporting continued store rollout momentum, and our balance sheet remains strong with available cash and debt facilities supporting continued investment in growth.

To summarize the financial year on Slide 18, we were able to again deliver strong sales growth for the period with store network growth combined with comp sales up 2% to deliver total sales growth of plus 17.6%. Our global expansion delivered 160 new stores opened in the financial year, finishing the year with a total network of 1,136 stores. Gross margins were again outstanding at 82.6%, an improvement of 60 basis points on the prior year, which was achieved along with a clean inventory position. This combined to deliver strong profit growth with EBITDA of $301 million, up 20.9% on the prior year. EBIT of $158.2 million, up 14.1% and NPAT of $95.6 million, up 10.7% with our strong cash flow and balance sheet position, allowing the Board to announce a final dividend of $0.33 per share to be paid in October. We're also very pleased to be able to announce a solid start to the new financial year with total sales up 16.4% and comp sales up 3% for the first 8 weeks. I'd like to take this opportunity to thank our entire global team for the outstanding work they are doing to deliver these results.

And with that, I'd like to invite you today to ask any questions you have. Many thanks.

[Operator Instructions] Your first question is from the line of James Wilson of Macquarie.

Just firstly, I mean, conscious you said that you're not going to give us any specific numbers around Jewells. But can you give us a sense of whether the trial was loss-making or profit-making in the second half of the year, please?

Thanks, James. We've not disclosed the second half. We did disclose it in the first half. I think our view would be a similar number in the second half to the first half. What we would say is we're excited with the new trial that we've got in our Brent Cross store in North London. We're seeing some very encouraging results coming through from that concept. It is a somewhat different iteration to the first concept and the initial signs are very encouraging. And then once we're in a position to give some more color on Jewells, we'll do so. But I think that's all we'd say on that today.

And your next question comes from the line of Garth Francis of MST Marquee.

The pace of stores slowed in the second half, and I appreciate that you made some commentary around making sure that any lease renewals were entered into with specific return hurdles in mind. Does that mean that we should expect a similar pace of stores, sort of 1.5 per week net openings for FY '27?

Look, we opened 160 over the financial year. I would be looking to a similar number to that in the FY '27. We've got a good pipeline established. We're focused on the markets we wish to open stores. We know where we're getting good traction. So I would see a similar number of stores in FY '27 to that of FY '26.

So a similar pace of closures as well then?

No, no, no. I mean, I'm talking to store openings. I mean, as I said, we said 160 last year. We'll be looking for a similar 160 for the new financial year. We assess all of our stores in terms of their profit. We'll take a decision on stores if we need to close some, if we need to refit some we need to relocate some. But I really wish for you to focus more on we're looking at 160 new store openings for FY '27.

Your next question is from the line of Chami Ratnapala of Bell Potter Securities.

Just want to focus on the ANZ region. The ANZ store performance looks like the average store revenue in the second half is down more than in the first half. Could you talk to what's driving this? And has there been any improvement as we go into FY '27 with the global comps more reflecting a quite strong level?

I think the most important thing I'd like everybody to acknowledge is we're a global business. We've got over 1,100 stores. We've seen 30% growth in the Americas. We've seen 30% growth in Europe, and we've got a very, very long runway of store openings. So we look at our business in a global perspective. We are fortunate in some regards that over the years, we've built a global business, one of only very few Australian global businesses. So we look to talk to the global number and the growth that we've delivered over the financial year.

We're insulated in some regards, and we're naturally hedged in some regards to the business over in Australia and New Zealand. So I'd really prefer people to look at us as a global business and the great growth we're delivering as a global entity.

Your next question is from the line of Sam Teeger at Citi.

I wanted to ask on working capital. It seemed pretty strong with a 13% reduction in inventory despite 18% sales growth. Has there been any structural efficiencies in inventory efficiency that we should think about going forward? Or are there some one-off benefits in '26?

Yes. We're always looking to improve our inventory efficiency down to that sort of BAU, and we've definitely made some improvements there. But a big part of that movement is just the movement in spot translation rates at the end of the financial year. So if you just look at the rates, that's cool. You can see equivalent decrease in trade creditors and inventory on both sides of the balance sheet.

Your next question is from the line of Allan Franklin of Canaccord Genuity.

Just a question on the efficiency of the business as you see it today. I understand you're talking at a global profile. So let's do that. You have invested hard into the cost base in FY '26, setting up support structures and other structures globally, obviously, noting the inventory comment you just sort of talked to. But to what extent do you feel you have now invested heavily in the business and maybe willing to let more sort of operating leverage flow through in forward-looking periods?

Look, our focus is always to manage our cost of doing business as tightly as we can. We're fully okay with a business that has a strong margin if we can deliver comp sales growth, which are acceptable. If we can continue with that strong margin delivery that we continue to execute and we can manage our CODB tightly, we're all fully aware that the operating leverage of that will filter down to the bottom line. So our focus has remained and will always remain on comp sales, on managing costs, on managing our margin and seeing that filter through to the bottom line.

And your next question comes from the line of Aryan Norozi of Jarden.

If I can sneak 2 little ones. Just on the result, you had about $8 million of impairment losses and loss on sale on PP&E in the second half of '26, which obviously hurt the result. To what extent is that sort of repeatable? And then also, did you book a tariff benefit in the gross margin in the second half, please?

Yes. Aryan, you can obviously see in the store count that we closed 43 stores in the financial year and relocated, I think it's 12. So that's mainly, as you said, loss on sales, just loss on disposal where you close stores and you've still got a written down value, so you got to write it off. So that and the ongoing review process of our store network that we always do means that some stores will close and we'll have to raise impairment provisions against or write-off. So basically, that number is just reflective of that number of store closures for the period. What was your second question?

Sorry, the tariff. Did you benefit from tariff refunds in the second half? And to what extent did that help the 83% gross margin, please?

Yes. Well, I mean, on a full year basis, the tariffs are in there and then they came back. So there's no impact from the tariffs in the full financial year. So there's a little bit of movement between the first half and the second half. But yes, it's full year so there is not an impact.

Your next question is from the line of Chenny Wang of Morgan Stanley.

Just wanted to see if we could get an update on how the new Series 5 stores are trading versus the existing fleet and maybe what that uplift looks like? And I guess maybe secondarily to that, just given you've rolled out that concept globally, interested in the consistency of the uplift across regions.

We don't give color in terms of the uplift we get from a Series 5 or whatever iteration. We don't give that level of detail. Obviously, it's sufficiently acceptable for us to be rolling out 53 stores and to continue to roll it out in the next financial year. So I take that as a positive. Chris quite rightly always says it's part of doing business. I mean, you have to keep reinvesting in your fleet and keep relevant. So some of it is a necessity to do just to ensure we're relevant to our customers. But clearly, it's been sufficiently acceptable for us to continue to roll this proposition out.

There is a question from the line of John Campbell at Jefferies.

So just back to store rollout. A few years ago, I believe you were struggling to open stores in the U.S. that basically met your return hurdles effectively, as I understand it, because rents were too high and they required key money and larger footprints and other things. But that seems to have turned around in the last period or probably the last year or so, and you're opening more stores in North America. Can you just comment on whether leasing terms have got better over there and it's generally easier for you?

I think we would own and will continue to own that, in terms of what we can do inside our house, and that is to do with product allocation, marketing and retail operational standards. So rather than talk to what's happening with landlords and rents, we believe we've done an improved job. We wanted to, and we've delivered on that. We've got a capable team. We've got a motivated team. I would look to the continued rollout in the Americas in terms of our improving efficiency and our operational standards.

Okay. No real impediments, I guess, is what you're saying because of your performance?

No. We're a well-represented brand over there. We are coveted by landlords to come into the centers. We've got a proposition they like. We've got good standards of stores, good operational standards. And I've recently been over in the U.S. for 5 or 6 weeks. And I've got a landlord base who are hungry for the Lovisa business to be in their centers.

You have a follow-up question from James Wilson at Macquarie.

Conscious you wanted to talk on a global level. But I just ask about sort of the refurb and CapEx program in ANZ in particular. Can you just run us through maybe sort of how much of a drag closures for refurbishments might have been in the second half and whether they were sort of weighted to earlier in the half or later to the half?

There's not really a lot to see there. I mean, we renovate or refit a store when the lease comes up when we're negotiating with the landlords for renewal and we've got some tenure so that we can depreciate the capital. We've obviously been sufficiently encouraged with our new proposition to roll it out. But it's normal cadence or rhythm of the business is what we've been seeing in the second half to be totally candid.

[Operator Instructions] You have a follow-up question from Garth Francis at MST Marquee.

Just on the gross margin, seasonality is historically skewed to the first half. You obviously had a good performance in the second half. I'm assuming from the comments related to the tariffs, that was part of the benefit there. So just looking into '27, do you expect the seasonality to return to historics? And us not basing 1H '27 off the performance of the second half?

As Chris said, there was a little bit in the second half, but on the blended year, what came back, but there's nothing in the full year. Our focus is extensively will always be on markdown management and better products. So the team who work closely with me are focused on better product, better cost price negotiation with the vendors, lower markdown management, which means we retain more than we give away. I think we're pleased with the numbers we're reporting in terms of the margin and a 60 basis points growth. And our endeavor will be to continue to deliver acceptable gross margins for the shareholders.

Can you sort of unpack the gross margin benefit from those different buckets? I mean, was it substantially from a better promotional activity that you saw that uplift or from the sourcing?

I'm not trying to be opaque, but it's a combination of everything. I mean, if you put all the levers into better product, better buying, better quantification, lower markdown, better marketing, you get an outcome which is acceptable. And our focus is on all those inputs to get the right output.

Your next question is from the line of Wei-Weng Chen of RBC Capital Markets.

Sorry, I joined the call a little bit late, so I'm not sure if I missed this. But just on tariffs, just wondering whether you've confirmed whether you'd received a tariff refund from the U.S. in the second half or are you expecting anything in FY '27?

Yes. So we had already had the question, and the answer was that in the full year, there's no real impact from the U.S. tariffs because we paid them in the first half and then got some refunds in the second half. So it nets out to nothing in the full year. So, yes, and absolutely, what comes in the next financial year, we'll see what happens in the U.S., but that's outside of our control.

You have a follow-up question from Chami Ratnapala of Bell Potter Securities.

Maybe in the global context for the group, looking at Europe, which is your largest group, would you be able to give us an update of how the store pipeline looks like with the last bit of updates in June from your biggest competitor there?

We're focused on what we can focus on. We know the representative countries well. We know how many stores we have in those respective countries. We know how many stores we believe we can have in those respective countries, and we're just focused on delivering that number that we believe we can operate in.

And you have a follow-up question from Aryan Norozi of Jarden. Aryan, you might be on mute.

Sorry, guys. Sorry. Just on the comps, July, August, obviously, up 3% in like-for-likes and you're cycling plus 6% last year. And for the rest of the half, the comps get way easier, like plus 1%. Can you just run through if there's any one-off benefits or timing impacts from this year in terms of that explains the stronger comp update and whether that normalizes? Or is the way I'm thinking about it in terms of getting easier in terms of comparables the right way?

Well, you're right to point out that we're cycling some big numbers because as we've called out this time last year, in the first 8 weeks, we're up 5.6%. So we're 3% up on the 5.6%. We've called out there's been improved momentum in the month of August, which is correct because that's how we're seeing it, and that's what's happening. Credit to the product team, credit to the merchandising team and the operational team for delivering those 3% comps. And as we said, particularly pleasing in the last few weeks as we progress through into August. We're very cognizant of the numbers ahead in terms of what comp sales we're up against last year. And I would say we've got all of our plans in a row to continue to deliver the barometer of health, which is a strong LFL. That's our focus. That's what we do every day.

And you have a follow-up question from Sam Teeger at Citi.

I wanted to ask around the higher rate of store closures. I was wondering, have your internal hurdles become more stringent or have the performance of the stores closed softened?

Have they? I do not know what. Say it. Sorry, I did not catch the final bit. Can you say that again?

So I'm asking, is the reason that you're closing more stores a function of your internal hurdles becoming more stringent? Or is it because the performance of the stores have softened?

Our internal hurdles have not softened. Our internal hurdles have always been the same and they'll continue to be the same. We simply believe that there's better quality stores that we can do deals on with landlords in better centers and better locations. And if there's a better option, that's what we're going to take. So what I would say is the quality of the stores that we've been opening in the last financial year have been of a high quality. We monitor the performance of those stores against their respective pro forma against their ROI and where we see there's a better opportunity, that's what we've been taking.

Makes sense. And then are the marginal returns on new stores still consistent with the historical Lovisa rollout model? How has that changed over the last decade as you guys have scaled globally?

You know as well as anyone that that's not a simple question to answer and one that we engage in. Things have changed a lot in the last 10 years in the business. So we just play every store as it comes and make sure it hits our return hurdles.

And this concludes our Q&A session for today. I would like to hand back over to John for closing remarks.

Thank you, Paulie. Well, once again, thank you for taking the time to join us on this call this morning. We are pleased to announce these numbers today for FY '26, and we're equally encouraged with the start to FY '27 with the 3% comp growth improving in the month of August. If we see any of you later, look forward to it. But for now, thank you for taking the time to join Chris, myself and Mark this morning. Thank you.

This concludes today's conference call. Thank you all for joining us. You may now disconnect.

Thank you for standing by, and welcome to the Lovisa Holdings Limited FY '26 Half Year Results Briefing. [Operator Instructions]

I would now like to hand the conference over to Mr. John Cheston, Global CEO. Please go ahead.

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 Cheston, Global CEO. As you are aware, this morning we published our half-year results to the ASX, and we would like to talk you through them now. I'll do a page turn through the highlights of the presentation, and we will then have to take questions at the end.

If we first of all turn to Page 3, we will talk through some of the highlights of the year. I'm pleased today to present a strong result for the first half of FY '26, a true milestone for the business with sales exceeding $0.5 billion for the first time, which is again evidence of strength in the team, the product, and the potential of the business.

Our store rollout maintained the momentum from the second half of FY '25, opening 85 new stores for the current half, taking the store network to 1,095 stores at half-year end. This allowed us to deliver strong growth in total sales of 23.3%, which included comparable store sales up 2.2% on the prior half year.

As you will all know, we opened the first trial stores of our potential new global brand, Jewells, in the U.K. in June, and the results of the Jewells business are included in our first-half reported results for the full period. As Jewells is a strategic start-up, we will not be talking about it as part of today's results. And to assist with comparability with prior periods, we have presented underlying financials in our ASX announcement today which exclude the effect of Jewells on both the current and prior half year. So when I refer to underlying metrics on today's call, it represents performance of the Lovisa business excluding Jewells.

Our underlying total sales were up 22.7% for the half year, with our underlying gross margin a real highlight at 82.9% for the half, up 50 basis points on the prior half year.

We continue to invest in the cost structure of the business to support ongoing growth in stores and online, and the investment in the Jewells start-up phase. With all of this combining to deliver an underlying EBIT of $109.1 million, up 20.4%, and underlying NPAT of $69.6 million, up 21.5%, which has allowed the Board to announce an increased interim dividend of $0.53, up $0.03 on the prior year, to be paid in March.

If we turn to Page 5, you can see the sales performance for the period that shows the benefit of our continued store network expansion with strong sales growth for the half year. 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 APAC regions continue to be our biggest opportunity through a renewed focus on operational excellence with structural changes to our operations team now in place and starting to deliver benefits.

I'll now hand over to Chris Lauder, our CFO, to talk through our financials.

Thanks, John. Morning all. If we turn to Page 6, underlying gross profit was $412.9 million at an 82.9% gross margin, up on the first half of last year by 50 basis points, which was achieved on top of the 170 basis point increase achieved in the first half of FY '25 and 220 basis points higher than the first half of FY '24. This result has been delivered from tight management of supplier cost prices, promotions, 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 we have been able to maintain our inventory in good shape.

Turning to Page 7, I'll talk about profit. As you can see, we have again been able to deliver strong growth in both underlying EBIT and NPAT while continuing to invest into the business with a focus on service and management structures, technology, and supply chain to support our constantly growing business. As a result of all this, underlying NPAT was up 21.5% compared to the prior half year to $69.6 million, with higher interest expense and depreciation on store leases having an impact as a result of the ramp-up in new store openings in the past year and our constant focus on keeping our store network strong. This enabled the investment in the Jewells start-up phase, after accounting for which reported NPAT was at $58.4 million.

Turning to Page 8, you will see that the cash generated by the business has again been a highlight. Cash from operations before interest and tax of $183.8 million for the half year, up 30.3%, reflecting tight management of our working capital. Cash capital expenditure for the period was $31.7 million, predominantly for new store fit-outs as well as store refurbishments and investment into new technology. Cash interest and lease payments were also higher than the prior year by half year due to the growth in the store network and higher borrowings and interest rates.

Turning to Page 9, you will see that the balance sheet remains strong with a clean inventory position and significant liquidity available to fund growth. The solid profit result for the period and continued strong cash flow and balance sheet position has allowed the Board to announce an interim dividend of $0.53 per share, up $0.03 on the prior half year, representing a distribution of 100% of earnings.

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 CapEx requirements in the context of prevailing economic conditions.

I will now hand back to John.

Thank you, Chris. So if we turn to Page 10, a quick update on store numbers. The key driver of future growth for Lovisa continues to be in our global store rollout. We finished the period with 1,095 stores trading in over 50 markets, with 85 new stores opened for the half year and 152 more stores trading than the same time last year. We remain focused on continuing to grow the store network globally and were pleased that we were able to maintain the momentum gained in the second half of FY '25 through the first half of FY '26.

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 39 new stores, and provides us with a very strong base to continue to expand from. In the Americas region, we were able to continue the momentum in our U.S. and Canadian store rollout with 18 new stores opened in the Americas during the period. We also were able to open 2 new franchise markets in Ghana and Reunion.

Turning to Pages 11 through 18, you will see some images of our latest store fit-out concept which we call Series 5. We have begun to roll out to new and refurbished stores across the world this concept. The concept is designed to give a more refined and elevated feel to our stores and adds a new piercing studio store-in-store concept along with new elements such as digital screens.

On Page 19, I'll talk to the trading update for the second half to date. Trading for the first 7 weeks of the second half saw total sales up 21.5% on the same period in FY '25, with comparable store sales for this period up 1.6%. 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 investments in growth.

So to summarize the half year on Slide 20: We were able to again deliver strong sales growth for the period with store network growth combined with comp sales up 2.2% to deliver total sales growth of 23.3%. Our global expansion delivered 85 new stores opened in the period, finishing the half year with a total network of 1,095 stores. Gross margins were again outstanding at 82.9%, an improvement of 50 basis points on the prior half year, which was achieved along with a clean inventory position. This combined to deliver strong profit growth with underlying EBIT of $109.1 million, up 20.4% on the prior half year, and underlying NPAT of $69.6 million, up 21.5%. With our strong cash flow and balance sheet position allowing the Board to announce an interim dividend of $0.53 per share to be paid in March.

We're pleased to be able to announce a solid start to the second half, with total sales up 21.5% and comp sales up 1.6% for the first 7 weeks. I'd like to thank our entire global team of over 7,000 employees for the outstanding work they are doing to deliver these results.

And with that, I would like to thank you for joining us today, and we're happy to take questions. Just to remind you on the call, we have our Executive Deputy Chairman, Mark McInnes; myself, John Cheston; and Chris Lauder, our CFO, and any of the 3 of us would be happy to take your questions. Thank you.

[Operator Instructions] Your first question comes from Shaun Cousins at UBS.

Maybe just a question regarding the Americas. Sales per store increased well in the first half of '26, more than other markets. What's driven that increase in sales per store? Was it the U.S. tariffs driving higher prices with no volume headwind? Was it a stronger consumer, market share gains from Claire's, or just improved execution? Could you maybe just dig deeper into what's driving that performance there in the Americas, please?

Yes, for sure. Thank you. I think you've actually answered your own question, and I'm saying that with utmost respect. There is definitely a buoyant consumer. The consumer is out there and spending, and we're pleased for that. I think the team over there have done an exceptional job in terms of execution. There's been a big focus on that, and we've got a strong team who are delivering. I would really put it down to product excellence in terms of delivery of store standards and a buoyant consumer.

So it wasn't -- if I was to be unkind, it wasn't just all tariffs? Like that would be an inaccurate assumption?

Yes, that would be inaccurate.

Yes, no, that's fine. Maybe just secondly, just on Jewells. Thank you for the disclosure there. Were the losses in the second half of '25? How do we think about them relative to the first half of '26? Just in that I got the size of the Jewells losses wrong, they were bigger than I thought. I just want to get a better understanding there of maybe where the second half of '25 might have been. And just more generally, what's the path to reducing losses in this business, please?

Yes. I mean, we look at Jewells as a modest investment to potentially find a second global brand. And if you look at the market cap of Lovisa at $3 billion, I mean that's how we should look at it, and that's how we would urge you to look at it. A modest investment to potentially give us a second global brand.

We're not going to give any color at the moment in terms of what the second half looks like. We've obviously been experimenting with that brand. We've been refining the product proposition, we've been refining our pricing and all of the things you would expect us to do. But we've called it out as we would expect to give you the clarity of where we're at, but it's a pretty low cost to hopefully give us a second brand. And in due course as we progress, obviously into the second half, we'll obviously give you more color in terms of where that potential new brand is going.

And sorry, pardon me, maybe just to clarify, what were the losses in the 6 months ended June '25? The history. Just can we compare them? Are they the same as what you did in the 6 months ended December '25, or is it -- just if you've got that reference point, please?

They were pretty insignificant because the brand didn't commence trading until early-mid June, that was when we commenced trading. So there was a little bit of OpEx in terms of salaries and team members, but it was not particularly significant really.

The next question is from Sean Xu at CLSA.

Based on my calculation, your global comp sales has materially slowed down from the 3.5% printed for the first 20 weeks of the first half to a negative 2.1% for the last 6 weeks during the holiday trading period. Could you please give me some color on the reason why and which regions underperforming the last 6 weeks of first half '26, please?

Yes. I mean, we don't give comp sales by region. We've obviously called out the headline comp sales and we've called out the first 7 weeks. I think we would say in AUSPAC, we've introduced some new team members. We're excited about the new product which is dropping down now. So there's been a lot of effort and focus on product. Early sales that are coming through on new products are exceptional, so we're excited about that. And we felt it was necessary to make some changes in our retail teams in the AUSPAC area, and we've done that and those people are onboarded and are delivering.

We're not in the business of making excuses, but I think if you follow the market, in the last 7 weeks there's been unprecedented weather issues in the Northern Hemisphere, particularly the snows in the U.S. and particularly the snows and the ice and the terrible conditions in Europe and the U.K. And as you well know, there is also a timing issue with Chinese New Year. I mean CNY fell yesterday this year, whereas it fell at the end of January last year. So there's a little bit of noise in terms of weather and a little bit of noise in CNY. But we're doing what we can do in terms of what we get paid to do, which is product and retail execution, and I'm pleased to say that that's what we're focused on.

All right. Can I please do another follow-up on the impact from Claire's exit today, specifically the U.S. and U.K. market? Is there any incremental sense of sales uplifting you can see from Lovisa within the overlapping catchment when Claire's closed their shop?

Yes. Look, we focus on our sales in terms of what we take in terms of LFL by store and in total. You know what, we're not desperately working on is, are we seeing an uptick because of Claire's going? From our point of view, Claire's is an opportunity in many of the territories because if they're going and they have a piercing business and we have a piercing business, we can obviously take that market share. As you probably know, in the U.S. some of the Claire's stores have been saved, they didn't all go. And up until only a few weeks ago in the U.K., Claire's was still trading. It's only been in the last couple of weeks that they've announced that they are officially going back into administration.

What we do on a weekly basis is do a store sign-off. We're being selective about the Claire's sites. Some of the store sites were good, some of the rents they were paying were too onerous. So we are being very selective in the sites that we're taking as we see the opportunity to take market share away from them.

But if you asked us, John, it would be true to say that the Claire's opportunity is real and emerging in those markets based on when they're closing. And those opportunities are coming our way. But as John quite rightly says, we're being very selective about the property deals because one of the reasons they went into administration in those markets is that they paid too much rent for poor locations.

The next question comes from James Wilson at Macquarie.

Just firstly on Australia and New Zealand, it looks like revenue per store fell about 8% in the first half. Are you able to just give us some color on how much that was driven by closures for refurbishment of those stores and maybe if you're seeing any competitive dynamics emerge there that could be a drag on that number, such as Harli and Harpa?

Look, it's fair to say that we're definitely reinvesting in our fleet of stores in Australia and New Zealand. So that's a fair comment that we did have some time where stores were closed pending refits into our Series 5 store concept. And Series 5 concept is being rolled out more here in Australia and New Zealand than in other markets, because of course our business is mature over here whereas in some of the other markets we've still got stores that have only been open a year or 2 years. So there is something in that, I would agree.

Look, we have competitors everywhere. Mark and I were in Italy and Spain and the U.K. 2 weeks ago, and when people talk about competition, there's competition in our category everywhere. So we have to deal with that, we have to navigate that. I think what Mark and I talk to is, have we now got a team that we're confident in terms of retail execution in Australia and New Zealand? And we have. Have we made changes to our product lineup? Yes, we have. Is that product coming out and hitting stores now? Yes, it is. And are we confident in that product and those team of people that we've hired? Yes, we are.

And just another quick one. In terms of the revenue contribution from Jewells over the half, are you able to give us a little bit more color on that? Appreciate you've given us some helpful disclosures when it comes to EBIT and NPAT.

Yes. I mean we're -- you can calculate it from the presentation. What -- as John said earlier, we're not going to be talking about Jewells' performance in the presentation because it is just a -- in the start-up phase. You can work it out from the [ indiscernible ].

Okay. And sorry, just one more from me then. Just on those Claire's closures and the locations that have come up for grabs after some of those stores have closed. Are you able to tell us what the number of Claire's locations you guys decided to open in over the first half was? Like what percentage of say net new stores or the raw number came from former Claire's locations?

Look, the number is increasing now as opposed to in the first half. There were some. There were some, for sure. I don't have the exact number with me. But we look at it site by site, location by location. I mean, some of the Claire's -- I mean Mark said this, but some of the Claire's stores were in poor centers, and some of the Claire's stores were in poor locations within good centers. So we've been very selective. We've not taken this approach of "There's 50 available, let's take them all." We're being very selective. But certainly we are on our sign-offs, signing former Claire's sites off on a weekly basis, and we believe that momentum will pick up in the forthcoming half.

The next question is from Sam Teeger at Citi. Please go ahead.

Look, I think when you strip out Jewells, delivering over 20% earnings growth is a really strong result here, so well done. I want to just talk a bit about the rollout. How come the business has moved away from providing updates on store numbers in the trading update? Some of the research we did suggested January was a softer month for rollout. I know rollout is never linear so we shouldn't extrapolate it, but how confident are you, you can open at least 64 net new stores in the second half like you did in the first half?

Well Sam, it's John. We're confident. We're confident. We didn't not announce it for any particular reason. As Chris always says, there's always a bit of lumpiness in January. We opened, as you've seen, a significant number of stores with growth on the previous year in the last 6 months. That momentum continues into this 6 months. I definitely wouldn't read anything into that. As I've said, January is a bit lumpy, and we got a lot of stores away back in September, October, November, and into December. But we are feeling very confident about the rollout for the next 6 months and beyond. And beyond.

Okay. And just on Jewells, I don't want to go into the details because I know that's commercially sensitive at this point in time. But clearly looking at the share price, the market doesn't like the investment. So maybe if you can just share with us how patient you're going to be with Jewells given how significant these losses are at this point in time?

Mark. Do you want to take that, Mark?

Yes, and look, it's a great question, Sam. Look, I might quote Jeff Bezos, if that's okay, Sam. The worst that can happen is our operating margins will go up. The best that happens is we find a second global brand that can rival Lovisa in terms of store numbers globally and market capitalization globally. So in that sense, there's no downside.

Appreciate that, but like if you're still making these types of losses in a year or 2 years or 3 years, at what point do you think enough's enough, let's stop this for now and we can revisit this or another concept in the future?

I think that's a fair question. I think the Board and John; myself; and Chris, will be very sensible when it all comes to that. We're looking at, daily sales, daily metrics, store profitability, all those types of things you would expect us to look at. But the way you should look at this, Sam, is this is a trial for a second global brand. If we're successful, obviously this is how Lovisa started, right? If you go back to when Brett first started Lovisa and then when he floated Lovisa in 2014. If we find that second global brand, well that's outstanding from an overall company perspective in all the markets we operate, nearly 1,100 stores. If it doesn't work out the way we want, our operating margins are what they are reported today, and they're going to go up. And you should expect us to be sensible about that, Sam.

Okay. All right. And just the last question for Chris. Just given how much currency volatility we've seen recently, maybe if you can just talk us through how currency has impacted the first half result and how we should expect it to impact the second half result both on a translation and a sourcing perspective.

Yes. I mean -- and 2 valid points, Sam, in that the sourcing tends to go the opposite direction as the translation impact. So -- and a big chunk of our revenue and profit is denominated in U.S. dollars now. So there's a lot of natural hedge going on in amongst all that, and different exposures offsetting each other. So there's a bit of upside in terms of exchange rates year-on-year for this half. You guys can look at the rates comparatively between the periods and work that out.

What it will look like in the second half and going forward remains to be seen. Obviously some of the rates from a translation perspective have gone against us in recent times, but others will not move by as much. So -- and when say the AUD versus USD strengthens like it has, then on the sourcing side that gives us a benefit. So they'll all net out in the wash and be what they will be. We're not going to call out what that might look like for the second half specifically, but it's a good call out.

The next question is from Garth Francis at MST Marquee.

Maybe we could delve just into that sales growth component, Sam highlighted the FX move. It seems like there's also as you're opening new stores, you're getting an uplift as well. Is that as a result of the stores, the mix component where the stores that you're opening are better than the ones that you have historically?

Look, I think we're incredibly selective about the sites that we sign off. We're pretty ruthless in terms of the expectation on in terms of the return on investment that we demand from these stores. And I think it's fair to say that we have been pretty good in terms of the store sign-offs in the key markets that we know are very profitable and have got a big runway. Being very selective about the location of the site and very demanding in terms of the ROI. And we've been negotiating hard with the landlords to make sure we've got compelling deals. So I would take it as a positive the fact that the stores we've been signing off have been very accretive.

Terrific. And then just maybe on gross margin. In terms of the -- was there a one-off benefit just related to better sourcing from the Claire's closures? And is that something that you -- that new pricing deal that you've established, do you feel like that's something that will hold into the second half?

No. I wouldn't read anything into the Claire's demise in terms of giving us better sourcing. I would prefer you to look at it in terms of good product, good buying, and what we haven't got caught up in is buying business and heavy discounts and heavy promotions. I mean, you can see the margin growth of 50 basis points is a pretty impressive number where we've seen this around the world retailers have been discounting heavily to buy the business. We've not got caught up in that. We're focused on product, good negotiations with our vendors, and doing as limited promotions and offers as we need to. But I would see it more to do with a good focus on product and buying than anything to do with economies of scale because of Claire's demise.

You mentioned shrinkage which you've not pulled out before. Is that a significant problem in the prior period that you've managed to mitigate?

Look, we always have a focus on shrinkage. We're a global business in 50 markets. I mean, we have to have a very close lens on shrinkage. And we've made very significant improvements in terms of our shrink results, and we're very pleased with those, and we see those continuing.

The next question comes from Allan Franklin at Canaccord Genuity.

Just hoping to have a quick look into employee cost growth and the other cost growth. Maybe to just disaggregate that a little bit please. Just the extent to which there's store growth at a store level? Can you sort of define maybe change staffing or remuneration structures at store levels? The extent to which the investment into team structures maybe behind us, please?

Yes. I mean, the investment in that salary wages line, most of the growth there is driven by the new store rollouts. Obviously every new store you roll out, you've got to staff it. Yes, we make changes to staffing levels and the like on an ongoing basis to try and optimize service levels. But there's not a consistent program across the world that's impacted on that number. It's just normal day-to-day management of labor. Obviously, inflation in wage rates has an impact and pushes up the hourly rates around the world, and we've had to mitigate that. But we're happy with how we've been able to do that through the course of the first half.

Perhaps just then on some of the technology investments, just sort of defining where that is playing? Is that more just back-end systems? Is there a -- is there an extent to which you are going to push harder into e-comm and omni-channel, or do we continue to view this business as a store-forward footprint?

Look, I think you should view it as an omni-channel business. We're committed to digital, and investment in digital is ongoing, as is our investment in capital for the store rollout. Digital is more important in some markets than others. In the U.K. it's an important factor, in Australia it's an important factor. In some of our emerging markets, digital is still in its infancy. But I would look at the capital investment we're making in a considered way in both digital and online -- and stores.

The next question comes from Aryan Norozi at Jarden.

Just on the gross margins excluding Jewells, 82.9%. Just notwithstanding that sort of first-half/second-half seasonality where the second half is lower than the first half, any other drivers into the next 12-18 months? We obviously talked about FX, but any positives or other positives and negatives? For example, have you been discounting less stock as in liquidation mode and stepping back and well that's why the comps are a bit softer but your GP dollars are good? Just any other things that we should factor in the next 12-18 months, please?

Yes, not specifically, Aryan. I mean, we obviously don't like to talk too much about what we think is going to happen in the future, particularly not around gross margin. So we'll just manage all of the different levers that drive that outcome the same way we always do.

And can I confirm just actually the LTI targets, the CEO LTI targets, is that based on the statutory EBIT? And is that based on year-on-year growth each year, or is there a high water mark where in 1 year you've got to, sort of, if you miss it you've got to claw back? How do they work please?

I think we might let Mark answer that one.

Yes. The way that the LTIs are structured for the group are on statutory EBIT and their year-on-year growth figures. And that's all published in our annual report.

Perfect. Last one. Just how many -- just the point around ANZ sales per store. Can you just give some color on how many stores were closed for refurb this half? Just so we can look at what the underlying sales because the sales per store fell about 8% or 9%. Just to get an idea on what that underlying number is please.

Yes. I mean we would typically have 1 or 2 stores close monthly as they are refitted and refurbished. I mean that's the normal course of business. We've got 180-odd stores over in Australia. And you know, we continue to invest. I think it's fair to say -- I'll just reiterate what I said earlier, we've probably started to deploy more capital in Australia and New Zealand because the fleet is a little older over here. So there's probably been more stores closed in the first half than there has been previously as we've started to introduce Series 5 and refit and refurb the fleet. So I would say there's probably more were closed for a period of time to be refitted in the first half than probably in the previous years, I would say that.

The next question comes from Wei-Weng Chen at RBC Capital Markets.

So lease costs, they look like they've gone up about 43% but your store count's kind of only gone up about 16% year-on-year. So just wondering if you could speak to what the discrepancy is between those 2 numbers?

I'm assuming you're talking about the number in the P&L?

Yes. No, in the cash outflow.

Right. Yes, I'm not sure how to answer that one in a simple way because it's impacted by the way we have to account for these things under the new accounting standard. So obviously the biggest driver in that number is new stores and growth in the network. But yes, I actually can't give you a breakdown of it today, I'm sorry. We generally don't go down to that level of detail. But I can come back to you with that one if you like.

Okay, cool. And then the $10.8 million of losses in the Jewells business. How much of that was, if any, was a write-down of inventory? I just noticed there was some pretty large discounts on your Jewells website from about October onwards. So it doesn't necessarily look like it's fully reflected in your gross margins if I'm reading slide four right?

No, I'm not sure what you mean when you say fully reflected in the gross margins.

As in like if I -- if I'm reading your Slide 4 right, you can kind of imply a gross margin for your Jewells business. But it looked like there was a pretty big reset going on on your Jewells website. So I was just wondering how much of that $10.8 million in losses was relating to kind of a write-down of inventory?

Yes, I mean there'd be normal provisioning that we have to do when inventory is going to be sold below cost. That's all on the gross margin line in the P&L. So there's -- it's all there. You can see the margin if you do the back calc.

Yes, I think that -- I'll just add earlier point, it's a -- we're not really breaking that down because we're in the start-up phase of that business and that's what it takes to start it up. And we've disclosed the cost of that which demonstrates the underlying health of the Lovisa business. And we've disclosed the cost because we firmly believe there's an opportunity for a second brand for Lovisa.

Yes. Okay. And -- but can we -- should we be thinking about this $10.8 million as a kind of a run rate when we think about next half? Or it won't be like as large as it is this half?

Well, I don't think that's how you should think about it. I think John made that point earlier, I think you should consider this an investment that the company's making to find a second global brand, and the Board will be very sensible and the underlying Lovisa performance is very strong.

Yes. And then just last question. Appreciate the discussion earlier about store closures impacting the ANZ business. There is a boycott petition out there online. I was wondering whether you consider that at all to have had an impact on the business?

John, are you happy if I answer that?

Please.

Yes. No, not at all. We don't think that's had any impact on the business at all. We understand it's come as part of the court case, and that's part of the process. And we've had none of that feedback from our team.

The next question comes from [ Raymond Jang ], Private Investor.

This is just a question about the ANZ market. Just wanted to see if you could point to any particular regions where sales declined?

Look, it's John here. We don't go into that level of detail in terms of specific state or territory or region. I think I was pretty candid earlier, we know we had work to do in Australia and New Zealand from a retail excellence as in operational standards point of view. We've made some rehires, we've got some team members who've onboarded in the last few months and they're starting to kick some goals. So we're focused on what we can focus on inside our cage which is product and retail excellence. I've mentioned there's a lot of new product that's sitting down that we're excited with, and we're seeing some good results. So I think you've got to look at it is ANZ is -- AUSPAC is one of our 3 regions. We've got EMEA, we've got the Americas and we've got AUSPAC. We're focused on all of our territories. I've mentioned that we've been spending money on the fleet of stores over here. We probably didn't invest as much capital in Australia and New Zealand previously. We're doing that now, and we're focused on product and retail excellence. And I think that's what we would say on that.

No worries, appreciate the response, John. Just one more question. How are you finding the competitive dynamic in the Americas market compared to Australia?

Look, it's -- the category we play in, there's competition everywhere. I mean, there's an abundance of competition in North America, in every single shopping center, be it kiosks or be it listed jewelry retailers or be it independents. It's no different the world over. It's on us on what we need to do in terms of product and retail operational excellence. It's all within our view, it's all within our hands and that's what we're focused on. So I think it's a competitive industry.

But like I said to someone recently, you wouldn't go into the jeans business if you were petrified of Levis, Wranglers, Mavi, you name it. You wouldn't go into white shirts where there's a range of white shirts that are out there for a guy to buy. I mean, competition's here to stay, it's not going anywhere. It's not going to go away. It's on what we can do in terms of our product, our price proposition, our hierarchy, our good, better best, our pricing, our sell-through, our quantification. We're focused on what we can focus on which is all within our hands and our capabilities.

The next question comes from Sean Cousins at UBS.

Just a follow-up. Just on the rollout of the new format, should we see a step-up in the broader rate of CapEx? It was $61 million last, in full year '25, $31 million, $32 million this year, excuse me, this half. Will the new format see a step-up in CapEx or that should broadly be captured under the existing sort of CapEx range that you've done?

Yes, I mean the early stages of rolling out any new store concept is more expensive than the old concept, so that has impacted on the CapEx in the current year. But as we do more stores, get better procurement, that should be able to offset a bit. Obviously with the marquee stores, prime locations, we'll spend a little bit more and -- because it'll get the return on investment. So you may see a little bit, but we'll just continue to invest where we need to keep the store network looking as sharp as it can.

But in short, we shouldn't anticipate a dramatic step-up in overall CapEx? Is that what you're saying there? Sorry Chris?

Yes. I mean there's no program to go out and refit a massive number of stores outside normal leasing time lines. So process is as leases coming up for renewal we'll do a refit at that point rather than mid-lease. So it should be the same sort of cadence as we normally have.

And with that, just given that normal cadence, how does that help you address a somewhat underinvested like ANZ network in terms of that they tend to be sort of older, they like there? Can you make more dramatic changes in that you've got -- it's a competitive market here in Australia as it is in other sort of places, but you've got probably newer competitors that are presenting better looking stores than your historic competitors, do you not need to go a little faster in Australia and hence there like you need to be a bit more urgent on that?

Yes. I mean, wherever we need to, we'll invest the funds, Shaun. I think is the answer to that. So if there is an urgent need then we'll find a way to get it done. Otherwise, it's the normal process that we follow. Which to be honest with you, that is part of the normal process. We have competition everywhere in the world and we have to adapt to it and take whatever actions we need. So this is not just an Australian thing.

Operator, are you there? I don't think so. Okay. It seems there's no further questions. So if you're still on the line, I think on behalf of Mark, Chris and myself, thank you for joining us today and asking those questions, and we look forward to speaking soon. Thank you.

Thank you for standing by, and welcome to the Lovisa Holdings Limited FY '25 Full Year Results Briefing. [Operator Instructions]

I would now like to turn the conference over to Mr. John Cheston, Global CEO. Please go ahead.

Thank you. Good morning, everyone, and thank you for taking the time to dial in today. On the call today, you'll have our Executive Deputy Chairman, Mark McInnes; our Group CFO, Chris Lauder; and myself, John Cheston, Global CEO. As you are 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 through the highlights of the presentation, and we're happy to take questions at the end.

If we start by turning to Page 4, we will talk through some of the highlights of the year. I'm pleased today to present another solid result for the FY '25 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 $138.7 million, up 8.2% and an NPAT of $8.3 million, up 4.8%, which has allowed the Board to announce a final dividend of $0.27 to be paid in October.

If we turn to Page 6, you can see the sales performance for 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. Good morning, all.

If we turn to Page 7, gross profit was $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 '24 and 310 basis points higher than FY '22. 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 LTI expense from $11.9 million in the prior year to $2.1 million in the current year. As a result of all this, NPAT was up 4.8% compared to FY '24, 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 9, you will see that cash generated by the business has again been solid with cash from operations before interest and tax of $243 million for the year, reflecting tight management of our working capital. Cash capital expenditure for the period was $55 million, predominantly from new store fit-outs as well as store refurbishments and investment into support technology. Cash interest and lease payments were also higher than prior year due to the growth in the store network and the higher borrowings and interest rates.

Turning to Page 10, you will see that the balance sheet remains strong, with clean inventory position and significant liquidity available to fund growth. The solid profit result for the period and continued cash flow and balance sheet position has allowed the Board to announce an unfranked final dividend of $0.27 per share, taking full year dividends to $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 CapEx requirements in the context of prevailing economic conditions. The Board did not currently have a specific dividend payout ratio, and we'll 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 opened for the financial year. Although the pace of rollout was slower than prior years in the first half, we remain focused on continuing to grow the store network globally and we were pleased that we're able to deliver a significant acceleration in the pace of rollout through half 2.

The strong base we have built in the European markets 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 1 new company-owned market for the financial year with our first store in Zambia opened in the second half. And we also opened 3 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 at the new piercing studio store in-store elements 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 up 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. And 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 investments 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 '26 to date. Trading for the first 8 weeks of FY '26 saw comparable store sales for this period up 5.6% and total sales up 28% on the same period in FY '25. 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 to see the store rollout momentum to continue. We continue to focus on opportunities of 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 opened 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 the clean inventory position. This combined to deliver good profit growth with EBIT of $138.7 million, up 8.2% on the prior year, an NPAT of $86.3 million, up 4.8%, with our strong cash flow and balance sheet position, allowing the Board to announce a final dividend of $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 '26 to date.

I want to thank 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're happy to take any questions you have.

[Operator Instructions] Our first question is from Aryan Norozi with Barrenjoey.

Just a first one for me, in terms of the store rollout, I appreciate it's going to be lumpy. There's always going to be ups and downs. But in terms of just directionally, like, in the second half of '25, you opened about 81 net new stores, excluding jaws. So you're annualizing at [ 160 ] stores at the moment, is that annualized rate the way we should be thinking about sort of the business' 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 so maybe it's a bit less than that? Any color would be appreciated, please.

Ari, yes, as you know, we can't confirm or to know what the store rollout numbers are. But I think first half, we're obviously a bit disappointed in the pace of rollout, and we said that we had expected to ramp up in the second half, which it did, and more so towards the Q4. So yes, we're far more comfortable with where we've landed for the full year. And the pace in the first 8 weeks is probably a little bit slower than that. But as you said, it's lumpy and will vary over the course of the year. So yes, I think if you look at the FY '25 full year outcome, we're much happier with that sort of level, but obviously, it depends on timing of when leases are executed and we get them signed off and we actually get the stores open.

Perfect. And just on the cost growth. So I mean in second half '25, your costs of doing business grew about 28% and your stores on average grew 12%. Now I won't bother asking about does integration costs because you probably won't say it, but I'll leave it to someone else. But even if you assume a few million dollars for that, it's a big step-up in growth year-on-year. Like, to what extent are those costs in the base? And so moving forward, first of all, we have to annualize it. And second of all, you grow it on that base. Or is there a cost that will fall out of the business next year and these are maybe more temporary costs in the business?

Yes, I think you're right. We're not going to be calling out any specifics on the jewels implementation costs. Otherwise, we would have put it in the announcement. So it's a trial pilot. We 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. So there's a bit of IT spend in there where a lot of that goes through as OpEx these days because everything is cloud-based, so that's impacted on the cost structure. And a lot of that cost is baked in, as you say. So we'll 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 2016, your EBIT margins should still be falling into fiscal '26 versus 25. You did 17% EBIT margin this year. Given the annualization of investment, is it fair to say that EBIT margins will probably continue to step down into '26, and then you'll sort of do what it does based on comps?

It depends on your assumptions around store growth, store network growth, and comps and the like, Ari. So obviously, we want to manage CODB coming down as a percent of sales, but we'll also continue to invest where we have to.

The next question is from Ed Woodgate with Jarden.

Congratulations to a great trading update. Can you hear me okay?

Yes, we can, Ed.

So I just want 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 on the quarter or qualitatively, how are you thinking about that and how that drove the trading update as well.

Edward, it's John. There were some modest, and I used 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 over the comp sale and the total sale. But obviously, we reacted as necessary, but they were very modest in nature.

Okay. That's helpful. And in relation to jewels. So I appreciate you're not saying March and it hasn't been open for long, but are there any trends you can talk to there about how it's being received initially? Or if you don't want to speak about it at this point, I understand, but just to put a check.

I think what we would say is the following. The U.K. for us is a very strong market. In total, we opened 32 new stores 7 of which were the trial concept stores for jewels. But let's not forget about the 25 Lovisa stores that we open. So that is a very strong territory for us, a very strong geography for us. We're learning. The jewels proposition was only opened at the end of the first week of June. We opened 7 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 in due course.

Yes. Fair enough. And then 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. But with the KPMs, that was a great result for the full year. It looks like based on my background with numbers, they were down 60 bps for the second half if I've got that right. So just I'd be interested to understand how you're thinking about that into '26 just in the context of the price rises. Yes, any sort of color that would be helpful.

Yes. 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. Yes, I mean, gross margin generally has been on the improved over recent years and improved to a pretty high level. So we're very happy with where it's at. Different points in time, we'll see that move. We obviously had in second half some impact from tariffs in the U.S. and we put prices up to offset that. But obviously, that's gross profit dollars, not necessarily gross profit margin, so that can have an impact. But yet, I think we're happy with where we're at in gross margin and how that will flow into FY '26.

Next question is from Garth Fanta with MST Marquee.

Could you just give us some color around the like-for-like sales of [ 5.6% ]. Is that constant currency? Or have you adjusted that to AUD to present that number to us? .

That's cost of currency we always report.

Terrific. Cool. And then just the tax rate, because it looks like that was 27% for the year. Is that sort of where you believe the better tax rate for Lovisa is going to sit going forward? Or could 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 markets?

Yes. It'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. So there's a couple of things in there that helped to pull it down. In terms of previous tax losses that we hadn't recognized that we got to utilize during the year. But yes, it's probably a little bit higher than that going forward, but we're happy to have a lower number this year.

And then I mean we've chatted a bit on pricing. Can you maybe just talk to the promotional environment and how promotional you've had to be? I mean, obviously, you mentioned that in opening remarks, but are you seeing that you're having to harder on certain lines just against the competitors that are in the market?

I wouldn't say specifically. I mean this business operates on 4 sales a year, like most retailers, a Christmas sale, a spring sale, autumn depending on which jurisdiction or geography in, and then a mid-season sale and then an autumn or spring sale, again, depending if you're Northern or Southern Hemisphere. So we've always consistently stuck to fall sales per year. We've always had a value proposition to attract customers into our stores, extensively at the front of the store. But as Chris said, we've got strong margins. We're about 100 basis points increase in margin. And I think that's a testament to the strength of the product, the strength of the proposition in which our team are buying for our customers and the response from the customers to it. So typically, you see an erosion in margin if customers are not happy with your product because you have to mark things down, and we're not seeing that. So we're in good shape.

Terrific. And if I can, one last one. Just with [ Claire's ] and the situation in the U.S., is that going to potentially offer you some new opportunities in the U.S.? Or do you think it will be more the shop-in-shop part of their business that's impacted?

Well, it's not missed on us. It's definitely not missed on us the situation of Claire's in terms of Chapter 11 in the U.S. and also the bankruptcy in Europe. As you know, they trade from 17 markets, North America, Canada and the U.S. and the 15 in Europe. We're in many of those markets. There's a couple we're not in. So 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.

Next question is from Sean Xu with CLSA.

My first is regarding, again, the trading update. That's a really strong like-for-like sales growth, shaping the first 8 weeks. Can you please give a bit more color on the breakdown by regions and markets, so a bit more insights on which market is driving the growth behind? And do you think you can maintain that rate of growth through the end of the year, please?

Sure. 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 you've got to break down by market there. That probably gives you a steer on where we're performing at our best. But yes, 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, right. Understood. And do you think that sort of a rate you will be aiming for towards for the full year FY '26?

Let's put it this way. The second half saw an uptick in our comps. So 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 has continued into the first 8 weeks of the new fiscal year. And without giving guidance, we are pleased with our performance. We're in 50 countries. I mean 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. But the blend across those 50 countries, we're very, very encouraged with that positive start to the new fiscal year.

Got you. If I may ask another question. Can you just give the tariff situation, is there any plan to I guess, meaningfully diversified away from China to take advantage of the tariff at charge? Are you moving to some other countries with lower tariffs? If that's a plan, I will be curious to know if any capacity constraint or quality consideration that will limit how quickly this diversification can happen?

I mean we already make a small percentage of our product in other markets beyond China. So we're not totally dedicated in 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. So 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. Just a very last quick one from me. We hear a lot about retail and supermarket these days about the retail client and set issue, things in particular are bad in Victoria. I'm curious to hear what do you see locally [indiscernible] and globally, please?

I mean it's interesting, Chris and I talked about this earlier this morning. We've made a lot of progress in terms of shrink and our loss prevention, and we're pleased with the progress we're making in terms of lowering our number. Often lost debenture or shrink is systematic in terms of process breakdowns or issues that you can control yourself. So we're not seeing this as an issue. We're focused on what we can do, what we need to do, and what we can do to improve our shrink position. But it's nothing of note that I would call out to you today that's causing us distress.

The next question is from Sam Teeger with Citi.

When I'm looking at ANZ sales per average store, it seems like it's slightly going backwards. So I'm just wondering your store refurb is going to be concentrated in ANZ. 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 as 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. So that's on us to choose to revisit those stores and to spend some capital on them. From our point of view, competitors come and go. I mean, we see competitors exit the market. We see new competitors coming. It's on us to make sure the product is 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. And then the Series 5, it does look good, much improved. How many refurbs did you do with them in '21? How many are you planning to do in 2016? And what's the average CapEx on each of these?

Well, 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 Series 5 design 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.

So 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 term and so on and so forth. There's a number of factors that go into them. But what I would say is we're pleased with the reaction that we're seeing to our Series 5 stores, and we've got evidence of those sales and those results across the world.

I think, Sam, obviously, the refurbishment of the store often is tied to the lease renewals. So you don't expect we're just going to go out and refurbish her we store in the fleet because we've got a new series. It happens over a period of time.

Sure. But it's safe to say it will be higher in '26 than '25, given the trial has gone well.

Yes.

And then, 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 of 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 note, is that there's been investments in this business to drive sales aggressively and hard. We saw a significant upswing in second half and some of that is the benefit of the investment that was put into the business to drive store openings and to drive comp sales. We're particularly pleased with the acceleration in the first 8 weeks of the new financial year. But I think what this business has done very well, it's invested capital in systems, in people and infrastructure to make sure we're set to continue the roll out of the stores. So 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.

The next question is from Chami Ratnapala with Bell Potter Securities.

Welcome John, and Chris and Mark. And firstly, a solid result today. Two questions from me. I think, firstly, quite a bit answer to the questions on jewels and Claire's. But firstly, what's the timing on maybe jewels going global? Are you willing to sort of talk about it? And with Claire's Chapter 11, will that be expedited given that the opportunity lies and you have a good read across?

I mean we're an entrepreneurial business. And doing a strategic trial of jewels in the U.K. is really what it is. It's a trial. It's a test and learn is to see how the consumer is reacting to the proposition, both in terms of the price product services that we offer, the store design. We're really not in a position to make a statement or a forecast in terms of how many stores and when and which companies we're not in that position. What we do efficiently and robustly as we monitor the sales, we monitor the return on the investment that was -- the capital injected to date. And when we're ready to talk about jewels, we'll do so. So I need you to look, if you could, as a trial and we're learning every day.

With regard to Claire's, we monitor the information that comes through both from the press and also from the market on that basis. We're across it. We're diligent and with the work given to that opportunity. And again, if there's something to share with you, we'll share it with you. But we think it's an exciting opportunity. It's a market share grab opportunity for us. Pershing is a good opportunity for us because they're a big operation in the [indiscernible] space. But 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 center, every clear store where we're co-located and what the opportunity is. We already know that today. So I think John is giving you a good flavor of organizationally and globally, we see this as an opportunity.

And then maybe on the digital side, you did say a bit at a high level. Anything on sort of would digital be sort of expedited, any initiatives to call out?

I mean 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. I mean, we are a strong bricks-and-mortar trader. As we know, our average selling price and our units, the transaction are what they are. So 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. The coexist. I mean you can't have a retail business today without both. And we'll continue to invest in the right way for e-commerce and omnichannel. But really, this is a strong network of bricks and mortar, and 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 8 weeks.

Perfect. And the last one from me is on just the regional performance. I mean, greater see the outperformance both in the U.S. and Europe versus sort of the NPAs 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 1 we're happy with. I mean you've seen from the slides, we've put to 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. But 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 and open more stores now in the United Kingdom.

Well, I think it's important, this is one of -- I think, the great thing about this business, it's one of Australia's retailers that has really gone on a global journey for 50 countries, and then we've got franchise countries on top of that. And we've been able to take this mineral business on a global journey and we're reaping the benefits of that, and we've had a strong start to the new financial year. So we don't call out particularly a market, but you can take it as read the fact that we're happy with the performance for the first 8 weeks of the new fiscal year.

The next question is from John Campbell with Jefferies.

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 off-line and reference Claire's once. But could you just maybe give a little bit -- particularly, John, given you're relatively new to the space, could you just give a little bit more color on what you're seeing in terms of 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. I mean if you get too caught up on what's happening to the competitors say, you don't focus on your day job and what you get paid to do. So 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 of the service? Of course, we do. We've got to stick to on this and focus on what we can do and what we can do well. So we observed 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, I mean, 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 2 stores in a location. This is a wonderful opportunity and one that we're taking very seriously.

And just adding to John's answer, I mean, both John and I come from a deep product background and we absolutely know if you focus on the customer and what customer needs in terms of product and that will drive incredible results. And I think you should know that, that's a key focus of ours.

Yes. Great. Just could I follow on just on the e-commerce front. Again, you 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, but it's in a slightly different way. We're focused on comparable sales growth and top line sales growth. And we know the levers we are absolutely confident we know the leaders to deliver what our shareholders expect. And we will pivot between what we need to do in terms of bricks and mortar and online. And I would like you to have confidence 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 path?

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 that this business has a wonderful opportunity full stop. But as you've seen, our focus has really been on the 162 stores that we just opened in the last financial year. And particularly, as Chris said earlier, the acceleration in the second half. We opened 1/3 of the new stores in the first half and 2/3 in the second half. And we're excited on what's coming out of those store openings.

Next question is from Chenny Wang with Morgan Stanley.

Maybe just on China first. It appears that the second store was opened in the second half after being at 1 for some time. So yes, 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 2 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. I mean there's many big operators who closed a lot of stores. The Inditex company have closed many, many stores in China. So all we're doing, and I reiterate what I've said about jewels earlier, this is a test and learn. We opened 1 store in Southern China. We've opened the second store in Beijing in Northern China.

And forgive me to have been repetitive, but what we're doing here is we're looking at how the consumers 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 met to that market in earnest and deploy capital, we're just testing and learning, but I was there. I gave you my attention a couple of weeks ago. But like Mark has said, it's a pretty challenged market over there in terms of the consumer. And we're in the business of opening stores where they are profit accretive and we can generate a significant return. So keeping it in view. We're not saying China is 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.A. and Canada and in European countries. And I think it's been John's absolute focus since joining about focusing the organization on where those biggest opportunities lie in the next 1, 2 and 3 years. And certainly, those parts of the world represent the biggest opportunity.

[Operator Instructions] The next question is from Allan Franklin with Canaccord Genuity.

Just wanted to reframe a couple of questions earlier 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 '24 versus June '25?

Yes. I mean we can't give you the employee count numbers that level of detail. But obviously, the head count increases as we roll out more stores. So Q4, we opened a lot of stores so we place to trade those stores. Some of the markets that we've opened in have got higher store wage costs to employees. So that pushes it up. But the objective there is to manage that as a percent of sales. Support-wise, we've definitely invested more headcount and some senior people to help run a much larger business and just the ongoing investment that we do and that we've been talking about for a long time, where we know that we need to continue to invest. And 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. So yes, it's an ongoing piece of work.

Sure. And then just in the other expenses, I think there's a quarter other buckets that accounted for $15 million of the increase of [ '26 ]. Can you provide a bit of detail of what's in there. I don't think it was a material change in the first half. It feels like a lot of that is coming into the second half?

Yes. I mean that's called other because it's full of a lot of other, obviously. So there's a lot of different things in there that rolling up to those numbers, what's included in there, things like marketing investments, so where we've invested more into digital marketing and events and all those other things that we've called out. There's some of the setup costs of jewels are in there. There is a few other things in there that I'm just trying to remember what they are.

But it's sort of a number that probably stays as you move forward a different way.

Absolutely. So there's not a lot of lumpy one-off things in there that are going to reverse in FY '26. So largely, you can assume that's baked into the cost structure.

There are no further questions at this time. I'll now hand it back to Mr. Cheston for any closing remarks.

Okay. Thank you. Well, firstly, 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, and 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.