Lovisa reported FY26 EBIT of $158 million, up 14%. Sales grew 18% in FY26 with second half sales up 12%. Gross margin at 82.6% improved 60bp. We lower our sales forecasts on lower store numbers but improved comparable sales, with comp sales for the first eight weeks up 3%. We lift gross margin and lower costs. While there is a strong pipeline of store openings, the store network will need to be optimised further and competitive threats are increasing.