👉 Background: Lovisa started back in 2010 as a fast fashion jewellery chain which has grown quickly to 927 stores in 49 countries. It listed on the ASX in 2014 and has seen its share price jump more than 1,100% since its IPO.

👉 What happened: Lovisa has just released results for the first 20 weeks of the financial year with its total sales rising 10% over the period. But, when you look at same-store sales over the same period, they were up just 1%.

👉 What else: The same-store growth was just half the growth that the market had hoped for. Now, Lovisa reckons that the cost-of-living increases means there’s less discretionary income to spend on things like jewellery… that break after a couple of wears.

What's the key learning?

💡Same-store sales is the revenue generated by a company's existing stores over a certain duration, excluding any income from new stores opened during that period.

💡This metric is crucial for investors, especially in a company like Lovisa that is rapidly expanding its store count. In fact, Lovisa opened 27 stores during the first 20 weeks of the financial year so overall revenue can blur the lines of where the revenue is coming from.

💡On the other hand, same-store sales will show a more accurate level of organic growth. This means investors can see whether growth is driven by a growing market share or its just because of the expanding number of stores.