Good morning, everyone! Hello, and welcome to the Lovisa Holdings Limited Fiscal Year 2023 Full Year Results Briefing. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star one on your telephone keypad. I will now turn the conference over to Mr. Victor Herrero, CEO. Please go ahead, sir. Good morning, everyone, and thank you for taking the time to dial in. On the call today, you have our CFO, Chris Lauder, and myself, Victor Herrero, 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. I will now do a page turn through the presentation, and we are happy to take any questions at the end. Before we get to the discussion on the results, I would like to start with a recap of the business strategy included on slide four, which set out the keys to our success to date and our focus for the future. Our strategy is unchanged. We continue to be focused on the continued global expansion of our physical and digital store network. As you will hear later, we have made a strong progress in delivering on this strategy during the financial year and have laid solid foundation for continued growth in the future. If you turn to page 5, we will talk through some of the details of the year. May I remind you, the numbers we will talk to today and included in our presentation include the effect of the new lease accounting standards. A full reconciliation is provided in the appendix to the presentation. All numbers I will reference will refer to year-on-year comparative, being on a 52-week week basis. I am pleased today to present another strong result for the financial year 2023, which again evidence of strength in the team, the product, and the potential of the business. Our sales performance for the full year was strong, with global comparable store sales up 6.3% compared to the previous full year. Our store rollout accelerated across the year, with 210 new stores opened and a net increase of 172 stores, taking the store network to 801 stores at year-end and resulting in total sales being up 33.1% on fiscal year 2022. Our global rollout remained a key focus in the financial year, and while the growth in the store network was primarily driven by the U.S., we also opened in 12 new markets, which I will talk about later. Gross margin was strong, and cost of doing business was well controlled while making significant investments into growing the business. As a result, we delivered an NPAT of AUD 68.2 million, up 20.1%, which has allowed the board to announce a final dividend of AUD 0.31 to be paid in October. If we now turn to the financial overview on page 6. As I noted earlier, our strong revenue growth for the year, up 33%, together with improved gross margins, allowed the company to achieve an EBIT growth of 31.5% to AUD 105.7 million for the year, and net profit after tax of AUD 68.1 million, up 20.1%. The net profit growth was slower than EBIT growth, with interest expense associated with our store lease liability up significantly on last year as a result of the large number of new stores added for the financial year, combined with higher levels of debt and higher interest rates. If we turn to page 7, you can see the sales performance for the year that shows the benefit of a store network expansion, combined with the store comparable store sales, store sales driven the overall, overall sales growth by 30% on the prior year, 53 weeks. Looking to our regions, most markets benefited from the strong first half of the half, financial year. Our Asian result was driven through both new stores opening and the strong first half sales cycling disruptions in fiscal year 2022. Africa continued to perform well and benefited from 10 net new stores, including 2 in Namibia and our first store in Botswana. European sales reflect our continued store growth and new market expansion, which in the second half included our return to the Spanish market, resulting in a net 55 stores to drive sales growth of 30%. The Americas continue its strong rollout store rollout momentum, increasing by a net 82 stores, including Canada and Mexico. This helped to deliver a 78.1% increase in sales in that region. I will now hand over to Chris Lauder, our CFO, to talk through our financials. Thanks, Victor. Morning, all. Turning to page 8, our gross profit was AUD 476.7 million, or an 80% gross margin, up on last year by 100 basis points, delivered from tight management of pricing and promotion and strong focus on optimizing gross margin. We've continued to focus on the efficiency of our inventory position, and are very pleased that we've been able to close the financial year in a good state. Turning to page 9, we'll talk about cost of doing business. Total cost of doing business for the financial year was up 36% on the prior year on a statutory basis, which includes the cost of the CEO LTI plan for the period and its post AASB 16. For ease of comparability with the prior period, we've presented the CODB table in this slide on a pre-AASB 16 basis, and provided the usual reconciliation between the statutory result and the pre-AASB 16 result in the appendix. For comparability purposes, we've also presented this chart excluding the impact of the CEO LTI expense on the period, which was AUD 27.1 million in the year, compared to AUD 18.7 million in the prior year. On this basis, the cost of doing business percentage for the year was slightly higher than prior year at 55.1%, reflecting good cost management in an environment where we have faced inflationary pressures, and where we've continued to invest in rollout of new markets and structures to manage the growing scale of the business. Just to remind you all, the accounting treatment of Victor's LTI plans requires the amount of each tranche of the LTI to be expensed over its vesting period, based on the current expectations of how much he will vest. As a result of the annual vesting profile of the LTI plan, this results in a higher expense being recognized in the first two years of the three-year plan, with the final amount recognized for each tranche determined at its vesting date, and true up at that point. Turning to page 10, you'll see that the cash generated by the business has again been strong, with cash from operations before interest and tax of AUD 188 million for the year, reflecting good management of our working capital. Capital expenditure for the period was AUD 60.7 million, predominantly from new store fit outs, which represents a significant increase on the prior year as the store rollout accelerated. Lease payments were up 20% on prior year, reflecting the growth in the store network, with the associated growth in balance sheet lease liabilities resulting in a large increase in lease payments classified as interest, with cash interest payments increasing 113% as a result of this, combined with the increase in the level of net debt on the balance sheet. Cash tax payments increased as a result of catch-up of tax installments after lower than normal payments in prior years, and reflects a more normal cash tax profile. Dividend payments were also high for the year at AUD 80.9 million, and all of these factors combined to deliver closing net debt of AUD 33.4 million. Turning to page 11, you can see that the balance sheet remains strong, with clean inventories and significant liquidity available to fund growth, following the refinancing of our debt facility date in April, resulting in an increase in term out three years and total cash facilities to AUD 120 million. The focus on distributing surplus cash to shareholders and the introduction of debt into the capital structure combined to result in the increase in net debt you can see on the balance sheet. The strong result for the year and strong balance sheet has allowed the board to announce a final dividend of AUD 0.31 per share, franked at 70%. As we 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 do not currently have a specific dividend payout ratio, and will continue to base dividends on the cash flow needs of the company and the structure of the balance sheet. I'll now hand back to Victor. Thank you, Chris. If we turn to page 12, a quick update on the store numbers. The key driver of project of future growth for Lovisa continues to be in our global store rollout. We finished the period with 801 stores trading in 39 markets, with a net 172 new stores opened for the year. Highlights include 72 in the US, as well as our first stores in 12 markets across the globe, including Italy, Hong Kong, and Botswana, as well as franchisee markets such as Peru, Colombia, and Morocco, highlighting the amazing global opportunity of this business. Across pages 13-15, we can see photos of some of our stores in our newest market to demonstrate the importance of consistency of presentation of our business. It doesn't matter if you are in Hong Kong, Italy, Northern Ireland, Botswana, or Morocco, you will see the same Lovisa wherever you go. As we move to slide 16, I would like to share some operational highlights across the last six months. We opened our new 5,000 square meter warehouse in Wrocław, Poland, to replace our existing 3PL warehouse there, which has so far provided a much improved level of service to our stores in Europe. During the year, also made some changes in our franchisee business, taking back the UAE franchisee market, and now in the process of converting this market to company operated. We have to date converted three existing stores to company-owned, and we are looking to expand in this important market. This has, however, resulted in the closure of a number of existing franchisee stores during the year. And since then, however, in the longer term, we believe this will be a much better strategy in the market. Our existing partner will continue to operate in the other Middle East, eastern markets. Recently, we were also able to open a number of new franchisee markets that has allowed us to enter the South America and North African market. We have also continued to invest in our digital platform to enhance performance, customer experience, and fulfillment capa, capability, including expanding our marketplace offerings and a means to reach to a bigger customer base, and just our physical stores and own website. On page 17, I will talk to the trading update and outlook for the coming half of the financial year. Trading for the first 7 weeks of fiscal year 2024 saw comparable store sales for this period, down 5.8%, and total sales up 13.1% on last year. At year-end, we have opened 21 new stores, together with 8 closures, which includes 6 UAE franchisee stores. The current store network is 814 stores. We continue to focus on opportunity for expanding both our physical and digital store network. Our balance sheet remains strong, and available cash and debt facilities supporting continued investment in growth. To summarize the financial year on slide 17, our sales performance was strong, both in comparable stores and new store rollouts. Our global expansion delivered new stores in new markets across Europe, Africa, Asia, and the Americas, resulting in a net 172 new stores open, finishing the period with a total network of 801 stores. This delivered an excellent result, with an EBIT of AUD 105.7 million, up 31.5% on prior year, and an NPAT of AUD 68.1 million, up 20.1%, with our strong cash flow and balance sheet position, allowing the board to announce a final dividend of AUD 0.31 per share to be paid in October. I want to thank you, the entire global Lovisa team, for the amazing work they are doing to deliver these outstanding results. With that, I want to thank you for all your time, and we are happy to take any questions. Thank you. If you have a question, please press star one on your telephone keypad. If you wish to withdraw your question, simply press star one again. Your first question comes from the line of Marni Lysaght with Macquarie. Your line is open. Good morning, Victor and Chris. Thanks for taking my questions. Perhaps make a start. You do have articulated, I guess, obviously, cycling price increases as being a, a driver of slowing comp sales growth over the second half. Can you kind of, I guess, give us a bit more color on, you know, what's driving the -5.8, maybe by territory and also the price increases implemented over the third quarter of FY 2022? Yeah. Hi, Marni. How are you? Chris here. Generally, you know, we don't break it out like that. And I guess there's nothing new in any, any of that. It's the same messaging around the price increases from, from FY 2022 and, the impact of that on, on 2023. So we saw the strong comps through the first half, and, and we said that it would drop off in the second half as we, as we got through that. ... I can't remember if we've shared a percentage increase on that, but it's not something we generally like to do. But I guess the main point is that that was definitely a driver in the slowdown in comps, as we had expected. Obviously, there's you know a lot of people have gone out with comp numbers in this market, so you can read into that what we will have that's impacting on us. But we're probably not gonna go into the detailed market by market, but we can obviously see how we're trading so far this year. Okay. Just so maybe I remember historically, you used to disclose at your outlook comment, like a target of 3.5%. Like, is that something that you think that you can work towards over the course of this year as comps get easier towards the back end of FY 2024? Yeah, I think it—we used to say, yeah, we'd like to be in the range of 3%-5% comps. Mm. And obviously, that doesn't change. We would love to be in the range of 3%-5% comps, but it's all very dependent on what's happening in the market and, you know, what we're cycling and all that. That's why we no longer make those comments because they're a bit pointless. We'd like it to be more than 5%. Marni, Victor here. I want to reinforce the message, you know, that we are in 39 markets at this moment, you know. Mm. and then there is with the good and bad of having that, you know, but I think at one point of time, maybe a market is performing better than the other one. And, you know, we have much more flexibility than two years ago when we were having 20 markets, you know? And I think that's the message that I want to... Or, the answer to your question is that we are becoming a truly global company, you know? And with the advantage of having a global company, that in some specific market, maybe you are not performing as good as other markets, you know. Yeah, and do you think that your consumer is still kind of soft at the moment, or is it just the cycling of such enormous, enormous strength this time last year? What I continue thinking is that we have a great wide space. Lovisa is received in every single market that we are opening, very well received. What I think is that they continue strong. I think you can see the results, and I believe that is still a strong category, you know, to be. Okay. Okay, and just one more final one from me. I can see now you've gone to, obviously, you know, leverage is only about 0.3x, but, you know, gone to being a net debt balance. Is that something we should continue to expect in the, you know, in the-- moving forward as you continue to roll out stores? And I also noticed, the, the increase in the financing facilities coming about AUD 20 million higher than what you kind of thought you got approval for back at the interim results. So what is it-- what's been the driver of that, too? Yeah, so on the first part of the question, the getting net debt onto the balance sheet has been what we've been targeting for the last couple of years, to be honest, but we've increased the level of dividend payout, so we've been pretty open about that was the reason for why we were paying out the level of dividend we were. Mm. So that's definitely a deliberate thing, and we'll continue to—you'll continue to see that. And then in terms of the debt facility, yeah, so what we announced at the end of the half was that we were extending the term debt facility to AUD 100 million, but the AUD 20 million multi-option facility was already there. That's just a rolling annual facility, so let's just add it the two together. So yeah, that wouldn't necessarily change, so that facility is still in place. All right. That's clear. I'll... That's it. Thanks for answering my question. I'll jump back in the queue. Thanks, maam. Thank you. Your next question comes from the line of Shaun Cousins with UBS. Your line is open. Thanks. So good morning, Victor and Chris. Just a question on store growth. Just curious, do you—are you confident you can maintain over 200 new stores in 2024, similar to the 210 that you did in fiscal 2023? And should we anticipate more new markets, or will growth be skewed to existing markets, please? Sean, thank you for your question. As we mentioned from the beginning, we will open the number of stores that we believe is the opportunity on, on one particular year, you know? It's-- we are not store collectors, we are stores-- we are opening stores that have profitability and that they are expanding our global brand, you know? So we are not going to go into the conversation on how many stores we are going to open this year, and it's going to be on the same line as last year. What I'm telling you is that the Lovisa has been opening 210 stores this year, and let's see what happen next year. But I can reassure that our stores, all the stores that will open, they will be profitable, and we will try to always expand our brand and in other markets as well. So, we are expecting maybe to open a few markets whenever the opportunity is coming. Great. Thank you. And then maybe just on costs, you know, the EBITDA beat relative to the market really came through gross margins and CODB sales. Can Can you just touch on, Chris, maybe the drivers of the gross margin being so strong, whether it's sourcing costs, scale advantages there, and then particularly how in CODB you managed the labor and rent so well there? Yeah. So and on gross margin, I mean, that a lot of that, that upside came from the first half, so and, and probably the first three quarters. So with the, the benefit of the price increases from the previous year. So we were, well up in gross margin in the first half, I think, for many, and we were able to maintain that through the, the rest of the financial year. So that's where most of it came from. And we've been, we've been pretty strong on, managing obviously the, the product cost side of the equation and, and keeping the inventory clean. That's probably one of the key things for us, making sure that we keep the inventory clean and then, you know, that naturally translates to not having to go as hard on markdown and that sort of thing. So combine all those factors and that's how we got there. And then on the cost side, again, obviously, first half, we had very strong comp, so that keeps that cost of doing business percentage looking pretty good. And we were able to, you know, match the inflationary pressures. Obviously, that got a bit harder in the second half to continue to do that. But, yeah, I guess with just constant vigilance and focus on cost, while we're still investing in the structure to grow the store network and rolling out into new markets, because that comes at a cost that we were able to manage that pretty well. Thanks. Finally, just, just how does the accounting on the UAE change work? Should we anticipate, obviously, your store numbers are coming down. You, you see those sort of the revenue you get from those, the sales on those stores obviously become corporate. What happens there on an EBIT basis? I'm just curious around, if there's any sort of change there that we need to be alert to in the shape. Obviously, as you move from franchise to corporate will change. Can you just maybe walk us through what that does, please? Yeah, I mean, because those franchise income, when it's a franchise market comes through one line on the P&L, you know, in the revenue line there, where you see franchise income. Obviously, when it's a company-owned market, it comes through just any other store. So sales, COGS, cost of doing business, down to the EBIT level. So, that's probably the way you need to look at it, look at that franchise contribution and reduce that number for the UAE market coming out. That adds to your normal modeling around our company-owned stores. Okay. All right. That, that's fine. Fantastic. Thanks, Chris. Thanks, Victor. Thank you. Thanks. Your next question comes from the line of Sam Teeger with Citi. Your line is open. Hi, Victor. Hi, Chris. What's the biggest impediment that stops you from rolling out stores faster than you currently are? And how do you expect this dynamic to change over the next year? Hi, Sam. There is no much impediment. It's basically, as I mentioned, always is, of course, you can open 1,000 stores, but I think it will be very irresponsible from us, because I think most of the stores won't be profitable, no? And so for us, we are happy with the pace that we are having over the last few years, and we will continue doing that. Got it. So you could just profitability, just the deals you're getting from landlords- Correct. to drive the pace of the rollout? Yes. Okay. In FY 2023, there's a higher rate of closures compared to FY 2022. How should we think about the rate of closures in 2024? I think closures are not a sort of straight line thing to measure, Sam. I mean, it's more about we're constantly focused on the store network and taking action where we think it's appropriate, throwing the keys back to the landlord to try and get better rent. Sometimes we win, sometimes we don't, and we have to close the store because of it. But yeah, 'cause in that number, there's obviously a big chunk of stores closed in the UAE that were franchised. So like we just talked about a minute ago. So and it's a much larger store network. So I haven't actually looked at the proportion of the total that the closures make up, but that's just a normal part of our business. You can expect it to continue. All right. And given the success that you've had previously, you know, using price rises to drive sales, would you consider doing it again? Any price rises planned for FY 2024? Definitely, we have to continue. I think the inflation, inflation pressure is a reality, you know, so whenever we believe that, we need to do price increases, we will do it, you know? And we are not shy, you know, and also we told you that we had a price increase in fiscal year 2022. So clearly, we will think about the some price increases in a specific market as well, whenever we believe is the right thing to do and whenever we have inflationary pressures. Got it. So should we think about anything this half? Is that likely? Well, for the time being, we haven't think about it, but I think in case we do it, we will report it. Mm. I think- Okay. The other part of it is we, we're constantly tweaking our prices just when we're doing it across the whole product range. So new, new products coming in, we'll tweak price points and that sort of thing. So we, we can get those benefits on an ongoing basis, just probably not as, you know, widespread as what happened in FY 2022. Got it. All right. Thank you. ... Your next question comes from the line of Julian Mulcahy with E&P. Your line is open. Hi, guys. Just a couple from me. Firstly, on the like-for-like sales in the first seven weeks, I get that you don't want to sort of talk on a market-by-market basis, but what's the trend been? Is it, did it like dip down early and it's gradually getting better, or is it getting worse? Yeah, I'm not sure there's any real comment we can make there. There hasn't been any major trend shift, I guess, is probably the main thing to say there in that period. It's been pretty consistent. Right. And in the store sort of rollout, I mean, you're 39 markets now, are there many more planned, or are you kind of done for the moment? I think—you know, we planned some, and we opened 21 stores over the last 7 weeks, and there are some plans to open over the next few months. And this is how we work, no? We sign the contract and later on, we open couple of months after, you know. And then, but clearly, I think we continue foreseeing opportunities on the store rollout, and we will continue doing. Right now, we have more flexibility because we are in so many markets, no? We are in 39 markets, and maybe we will open other extra market over the next coming months. Right. So in terms of like the likely profile this year, in the new markets, you know, it's been a varying, you know, rate of sort of acceleration. You went really hard in Poland and others, we've added, you know, only a few in the sort of second half. So can you kind of give us like a view on where the rankings are in terms of the new stores in this next year? I assume the U.S. is still the biggest by a mile, but where does it sort of fall after that? Yeah, I think it's more based on opportunity, Julian. So, you know, obviously the most opportunity is, you know, the U.S. is a big market, so there's a huge opportunity there, but Europe's also a big market for us, so obviously, a lot coming from there. But, you know, the ones that potentially in the markets that we're already in Asia, so, you know, you'll see it spread across the globe, but it just all depends on, you know, where the opportunities come up and whether we can get the deals done at the right price. I mean, that's, you guys know that. It's not about we're not specifically targeting anywhere in particular other than we just want to roll out stores that are profitable. Okay. Just finally, so in terms of, like, with the, you know, slowing global economy, what's your attitude to that? Is it to be more cautious in the rollout or take advantage of the opportunity? Yeah, I think everyone is talking about the global economy for the last few years, and at the end of the day, we've been very consistent, Julian, and we will continue being consistent and seeing opportunities right now in 39 markets, and hopefully we will continue winning by opening stores and by opening our digital network as well. No changes, continue gung-ho rollout? Correct. Thank you. Gung-ho is the right word to use, Julian. Thanks, guys. Your next question comes from the line of Aryan Norozi with Barrenjoey. Your line is open. Hi, guys. Hope you're well. First one from me. Just on the comps or the sales, or the sales as well. If you look at July, August, comps were down 6%. Same time last year, it was up 21%, so you're cycling price increases and a pretty good comp. If you go to the rest of the half last year, it slowed to 10% growth. So you went from 21% comps in July, August last year to sort of +10% for the remainder of last half. Mathematically, does that mean the comps will turn positive if just the current conditions continue for the rest of the half, or is that not the way to look at it? Basically, what I'm trying to get at is, to what extent do we extrapolate the -6 for the rest of this half, considering if there's no change in sort of the current sort of conditions in the world, please? Yeah. I mean, you're better at math than us, Aryan. So, that's, you know, you've probably done some good calculations there to work out what mathematically could be the outcome. There's obviously a lot of real-world stuff that goes into that to deliver that. But, yeah, obviously, you know, we're seeing the product of having some pretty huge comps in the prior year, and then, you know, once we get through that period, then it gets easy for us. Yeah, it's a lot of real-world stuff has to go into that process, not just math. But you, you guys, you guys see daily sales of and you know what the seasonality is like. Just, I mean, just so we set expectations right, and because I, I suspect there's going to be a wide range of assumptions moving forward, but like, is, is it incorrect to extrapolate the current comp decline for the rest of the first half 2024, considering if there's no change in the backdrop in the world? If, if, if your momentum and seasonality continues, is that the right number or just mathematically it will change? Because every year you're cycling a different lockdown or like I said, then you get to four-year stacked comp, so it just gets ugly. So just to, to, for everyone's benefit, like, is it... should it actually go sort of improve materially for the next few months because of, yeah. Yeah. Yeah, when we haven't given any guidance on comps recently, you're just, you know, articulating that it's been complicated and it's impossible to land on what that number should be. So it makes it pretty hard for us to give you any other guidance on how to calculate it other than what you've already done, which is look at what's happened in the past and, you know, look at the dollars that we're delivering and, you know, what those dollars would look like if you compare that to the same time last year as a comp. I mean, that's the best way to try and back calculate it and work out where you think it's going to get to. Okay. And just on the, thank you. Just on the gross margin, I mean, 2023 is about 80%. And then if we just think about the pluses and minuses, on the plus side, you've got obviously lower freight costs that everyone's calling out, sourcing benefits from manufacturers in China, so you're getting better rates. But on the negatives, you've got obviously a significant weaker Aussie dollar, and your hedges start rolling off, particularly towards the back end of next year. So how do we think about the balance of outcomes, and should we basically assume that you can maintain that 80% margin for 2024, or should there be a real weakness based on those things, please? Yeah. I mean, that's obviously what we're trying to do, maintain that level. With—like you said, there's a lot of moving parts in there and things that will impact on that. I mean, yeah, freight costs is a good one. But just remember, a lot of our product moved by air freight, so people are talking about changes in sea freight costs, then that tends to be a different profile for us. But yeah, you know, we're obviously not going to give guidance on gross margin, but our objective is that we certainly don't see that going backwards. Great. Last one, just on the cost, particularly the other costs around business lines. So obviously, in the first half, you called out that as, sort of setting up new regions and, sort of consultants and all that sort of stuff. If we look at the second half, it's still pretty elevated. So like, do we assume a lot of, a lot of those costs drop off into 2024, or is that the right base to annualize and, and maybe grow more just with inflation? Like, how do we think about the cost base for into 2024? Yeah. Yeah, I mean, generally, we don't say the costs are going to drop off, because we'll continue to invest to keep growing. It's, doesn't come for free, unfortunately. So, yeah, there'll be some stuff in the, in FY 2023 that won't happen again in FY 2024, but there'll be new stuff in FY 2024 that replaces it. So, and so, yeah, I mean, our objective is to make sure that we try to make sure that we don't see that CODB percentage rising, or if it is, it's not rising too fast. But the inflationary pressures are real, you know, particularly on store wages and that side of things. But yeah, it's our job to manage that. Great. Thanks. Thanks, Thanks, guys. Thank you. Your next question comes from the line of Ed Woodgate with Jarden. Your line is open. Hi, guys. Can you hear me again? Yeah. So just, just following on to some of the questions on GP, margin. So I appreciate, as you said, that, I mean, you had a good, strong full year result. As you said, it was first half driven. Looks like the second half was down circa 70 basis points from the first half. Can you just talk to the puts and takes there? What was the last bit? Can you just talk to the reasons for the decrease in gross profit margin from 70% by 70 basis points? In first half to second half, you mean? Yeah. Yeah. I mean, that's, that's not unusual to see that. So, yeah, so I don't think—don't read anything into that. I guess the, the main message is that, you know, we're—I think that the growth in, in gross margin was higher in the first half year-on-year. So where it should be now, and, you know, as I just said before, and we, we would hope that we can maintain that through FY 2024. Yeah. Okay. And then just on the store rollout trading update. So I know you've already had a few questions on this, but, I know you don't like again, providing quantitative targets, but you've said in the past that usually the implied run rate is a good indicator for the pace of the remainder of the year. It just seems like where consensus is for store rollout target of like, I think starting at 71 in FY 2024. Seems like you've got a lot to do. So is there, is there any reason why we can look at the, the store rollout to date on a gross basis, and it's just might have been a little bit slower than usual, and would it be reasonable for us to assume, an increase over the remainder of the year? Yeah, I mean, we've opened 20 or 21 new stores or something in the first 7 weeks. That's still a pretty strong pace. We keep saying repeatedly that it's not a straight line. So store rollout, you know, I think I said before, we're not store collectors. We'll open stores that are profitable and at the right time. We're not sitting here going, "Well, we opened 200 stores in FY 2023. We've got to deliver that again and then some." If we don't deliver that, that level of numbers, it's because you know, the deals hadn't landed at the appropriate time or with the appropriate metrics. I know it doesn't help you guys much because you're trying to land on what the number's going to be, but you know, we're not giving any guidance on store number, store rollout for the year. Just got to make your own assessment of what that current run rate means and what that extrapolates to for the full year. ... Okay, thanks. And then just one more for me. So, just the second half regional performance versus PCP, it looks like on a, it looks like ANZ, Africa, and Asia markets have softened a lot. Is there any reason not to assume that those regions are the main ones dragging on the year-to-date performance? Yeah, I think you can do the math, right? So you can see what that comes out to. But I mean, it is what it is. I'm assuming you just pick up what the half year numbers were, what the full year numbers were, and then try to back solve it. But you know, those markets were really strong in the first half. In terms of that overall comp number. So that's probably what you're more seeing there. And those numbers that you're working on obviously are inclusive of new stores and closures and all that sort of thing. So it's not really a comp position you're looking at. Yeah, sure. I mean, and that's it for me, but I guess obviously it's a high quality business and you guys have been doing a great job. I think people are just trying to work out, you know, the next couple of periods. So, yeah, thanks for taking the question. Yep. Thank you. Your next question comes from the line of Mark Wade with CLSA. Your line is open. Morning, gentlemen. Can you discuss the experience you've had as you've entered some of these newer markets, Victor, and how you've had to adopt or adapt, I should say, the business model to suit local trends and what have you? Yes, you know, our market, we opened in Granada, now in Spain, and basically so far was completely uneventful, no? We are coming back to Spain. As you may know, during COVID period, we decided to close Spain, and right now we are opening again. And I think, at the end of the day, we have some reference there because I think we were quite strong in the French market with more than 70 stores. So basically we are adapting a little bit of whatever we are selling in France. So, we adapt the assortment to that particular store, you know? But anyway, I think we open in end of June, beginning of July, and was uneventful, and I think the product, the customer is happy with whatever they are seeing, and they are shopping in our store. What is important that I mentioned on our script is that they basically we try to be very consistent on the image, on the customer experience, and everything in every single market. I think this is an important thing to say because it's appealing to this global customer in where we are opening stores or we are trading digitally. So you're saying that Victor, like, if you go into these newer markets, as you know, Botswana, for instance, it's the same, it's the same woman who's buying the product, you feel like it's resonating as it would in Spain, on the other end of the spectrum? I would say that I think they will buy the same as they are buying in South Africa. As you may know, we have a lot of experience in South Africa with more than 70 stores. Mm-hmm. So the Botswana case was an easy one to figure out what is the product that is going to resonate to our customers. But in general, at the end of the day, the assortment is quite similar in every market. Yeah. Okay. Yeah, that's the key. I kind of understand the assortment and the store selection and how the customer responds. Thank you. And, and, and you mentioned a change of heart on Spain. Can we, can we get a bit of an explanation on the, on Taiwan? I know six months ago it was a little bit vexed on whether that was a potential new market or not. Now it looks like you are in there. And what does that, what does that mean for other new markets in the, in the, in that Greater China region? Yes, I think Taiwan is a market with 23 million people, and which I think our products will resonate very well. And I think it was one of the markets that we opened on fiscal year 2023. And clearly, we are continuing expanding in Hong Kong as a market. Also, we opened several stores in Malaysia, and clearly, I think maybe there will be some opportunities in mainland China at one point of time. Mm. Okay, that's it for me. Thanks again. Thanks a lot. Your next question comes from the line of Johannes Faul with Morningstar. Your line is open. Hi, Victor. Hi, Chris. I had a question on your online business. Just if you could give us a sense of where online penetration sits, or at least like what growth you're seeing in that, in that channel. And also, do you have any more detail on that, that marketplace offering you mentioned earlier? Thanks. Yeah, we don't give penetration of online. We never have, and may never, ever. So obviously it's an important part of our business because we need to have it there and the customer needs it as part of the overall offering. But yeah, obviously, you can tell by the fact that we're not- ... calling it out and breaking it out like a lot of other retailers do, it's not a huge part of our total mix. It's still very important as part of the customer experience. Okay, great. Just on the cost of doing business. So I guess you both mentioned that you open stores when they're profitable, and I'm just trying to just verify on the cost of doing business, that going up, it's on an underlying basis, on a pre-AASB 16 basis. Is that driven by labor? So it's not, it's just labor cost inflation, it's not that newer stores are less profitable than the existing footprint? Yeah, not necessarily. No, it's definitely, labor cost is, is a, is an impact, but, it does vary a little bit depending on the market and, you know, in terms of the rents or the wages or, or whatever. But generally speaking, you know, it, it washes out in the, in the overall mix. So like I said before, it's just something that we just have to manage the relative economics to make sure that each store that we're signing off hits our investment hurdles, which are the same globally, so. Okay, got it. And then just on your debt covenants, where your ratio sits, did you break those out? I had seen those in the presentation, the fixed charge ratio, the operating leverage, and also cash conversion. No, I don't think we did, but there was plenty of headroom in there. I mean, you can calculate leverage. We calculate all of them pretty easily, so plenty of headroom. Great, thanks, Chris. Your next question comes from the line of Joseph Michael with Morgan Stanley. Your line is open. Morning, Victor. Morning, Chris. Thanks for taking my questions. Just the first one I had was just around the long-term incentive plan. The current one goes out to FY 2024. Things are obviously going really well based on the existing targets. When should we expect an update on a new LTI package for FY 2025 and beyond? Yeah, at the appropriate time, Joe. If there was anything to talk about now, we would, but there isn't. So we'll let you know when there is. Wonderful. Okay, thank you. And then I just had one other question, just around sort of the longer term potential. Just trying to understand how to think about new country launches. I guess every time you launch in a new country, should we think of that as increasing your medium or long-term store targets, or is it providing another sort of pathway to your existing target? I'm just trying to understand, is the longer term growth potential for Lovisa and the store rollout increasing? Yeah, I think we don't have any long-term store number targets. Definitely not out there in the public. So, you just got to think of every new market as an opportunity for us to open new stores. That's what it's about. I mean, it doesn't matter where we're opening them. We just, as long as they're hitting the hurdles and profitable, then we're happy. Great. And then just a last question from me, just around new store CapEx. I don't know if my math is right, but back of the envelope calcs, I think new store CapEx is down about 10%, and you correct me if I'm wrong there, but can you just talk about what's driving that? Is that a mix towards, you know, lower cost regions, or is there a deflationary element in there? No, I wouldn't read too much into that. I'd say it's probably more just to do with how much landlords have contributed towards the shop fit. And, you know, the mix of stores that we've opened in the year. I don't think we certainly haven't seen deflationary here, impacts on store CapEx. Got it. That's all I had. Thanks for your time. Thanks, Joe. Thank you. Your next question comes from the line of John Hynd with Wilsons. Your line is open. Good morning, and thanks for taking my question. Just drilling down a little bit further on some of the previous questions. In regards to stores, the closures in the UAE, what didn't you like there? What wasn't working? Are there similar stores that make up the portfolio that you'd be looking at this period? It's an opportunistic move, you know. I think, as you know, UAE is among some markets that everyone is having top stores over there, you know. And we thought that, I think by taking over some of the stores and closing some others, I think on the long term will be a good market for Lovisa. So that's why it's an opportunistic move, and I think that we will, over the long term, see the results of that strategic action. I mean, normally, that would have a positive impact on gross margins? Yeah. Yeah, I mean- Yeah. Obviously, going from a franchise income model to a, you know, own store, definitely. Obviously, at EBIT level, we'll see how it washes out, but it should be more profitable for us, otherwise we wouldn't be doing it. Yeah, and then on the U.S. stores, you're definitely at scale now. Have you got better visibility on how that can move around economics at the gross and cost of doing business lines in 2024 and 2025 now? Oh, I mean, yeah, obviously there's a lot of stores now in the business and in there for a full year and trading well. So, yeah, I mean, we're not going to break it out for you, but, you know, it shouldn't. If your question is, would we see any changes in the structure of the P&L because of having more stores in the U.S. going forward? I'd say the answer is probably no. It's already now, it's kind of baked in there. If that's what you're asking. Right. Adding a little bit on that, you know, what is important as well is that we have 190 stores in the US. I think we have a significant footprint at this moment. We are becoming a relevant brand for our category, and I think that we will continue being or developing the brand in the US market, which you know is a very significant market for any global retailer. And I think we are in 39 states at this moment, which is kind of a significant presence in many states, which is quite unique for a retailer because normally they concentrate in several states, you know. But I think so far our product offering has been appealing to almost every customer in the States. Okay. So you're probably... Are you happy with profitability there now? It's hard for us to get a read on. I guess if you were to, you know, increase the footprint again by 25% or 50%, how that would impact the bottom line? Yeah, I mean, if we do that, it's based on our normal investment metrics, so you would expect that it should, you know, obviously, we're never happy with profitability. We want more. Okay. Last one from me, on the dividend and the drawdown. You know, obviously, you're a growth-focused company. Does this mean that there's not as much infrastructure investment required going forward, or it's just an opportunity to open up the channels for the debt? So I'm not sure I answered the question for you, but I mean, definitely going forward, we will need to continue to invest in infrastructure. I mean, we're- Sorry, is it as significant as what you've done recently? Yeah, I think I kind of answered this a bit earlier on, that, you know, we look to maintain that cost of doing business percentage, because we're reinvesting into the business and, you know, we're not planning on stopping and, you know, like, staying where we are and with the, with the structure that we've got. So we're constantly just evolving and adding, and, yeah, spending more on what we can do to become more efficient. So you can expect that to continue. Thanks very much. Your next question comes from the line of Chami Ratnapala with Bell Potter Securities. Your line is open. Hi, team. Hi, Victor. Quick, thanks for taking my questions. Just wanted to expand on the regional performance a bit. The European region, at a headline level, looks pretty strong. Any callouts here? I mean, in terms of, is it more new stores or comparable sales? Just keen to hear. Thank you. We are quite pleased with the performance in Europe. As you know, we are in several European markets. We are also in some other markets like Poland, Romania, and Hungary. So I think we are overall very, very pleased of our performance in the European markets. Thanks for that. Your final question is a follow up from Aryan Norozi of Barrenjoey. Your line is open. Hi, guys, thanks, and sorry to harass you. Just last one, has there been any change in the number of stores meeting the unit economic criteria since the last time you spoke to us? So in Feb versus now, are you finding that fewer stores are meeting your hurdles or the same? I mean, we generally comment on a store-by-store profitability perspective, but no, no real change. Great. Thank you. There are no further questions at this time. I will turn the call back to Mr. Victor Herrero. Thank you very much, and we will see you or we will come back to you on in six months time. Thank you. This concludes today's conference call. Thank you for joining. You may now disconnect your line.