Do you own Lovisa shares? It's dividend day!

A little girls sings her heart out on stage with tinsel sparkling behind her, she is a star.

Are Lovisa Holdings Ltd (ASX: LOV) shares part of your portfolio? You might feel a bit wealthier today because the company’s FY24 half-year interim dividend is headed to your bank account.

Investors who owned Lovisa shares before 5 March this year are entitled to receive a pleasing payout.

Here’s what you need to know about the payment coming your way from the affordable jewellery retailer.

Lovisa dividend paid today

Lovisa shareholders are receiving an interim dividend payment of 50 cents per share today. On 4 March 2024, that payout represented a partially franked dividend yield of 1.6%.

Impressively, the Lovisa half-year dividend was 31% bigger than the company’s payment in the prior corresponding period.

It represents a very high dividend payout ratio because Lovisa only made earnings per share (EPS) of 49.1 cents, which was almost 11% higher than the prior corresponding period.

Meanwhile, the company’s overall revenue grew by 18.2% to $373 million, and it added 139 stores to its total of 854 stores globally — an increase of 19.4%.

What’s the likelihood of a bigger payout in six months?

According to Commsec, Lovisa paid an annual dividend per share of 69 cents in FY23 and is projected to pay an annual dividend per share of 78 cents in FY24.

Considering the company already declared a dividend of 50 cents per share in FY24, the forecast is 28 cents for the final dividend. This is lower than the 31 cents per share final dividend in FY23.

Broker UBS expects an even lower final dividend from Lovisa – its forecast is an annual dividend of 71 cents per share, which would imply a final dividend of 21 cents per share.

However, the estimates on both Commsec and UBS suggest Lovisa’s profit will grow in FY24, FY25 and FY26. Those projections could enable the business to boost its annual dividend per share in FY25 and FY26.

Trading update

In its HY24 results, Lovisa advised that the first seven weeks of the second half of FY24 saw comparable store sales growth of 0.3% year over year. Total sales for the second half were up 19.6% on the same period in FY23.

Since the end of the first half of FY24, it has opened nine new stores, bringing its store network to 860 globally, including its first new store in Dublin, Ireland.

Growing sales is one of the helpful factors for future profit and dividend growth.

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Motley Fool contributor Tristan Harrison has positions in Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa. The Motley Fool Australia has recommended Lovisa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.