Lovisa (ASX:LOV) to exit Spanish Market: Aus shares to open higher on US job data
Australian shares are set to rise at the open following gains on Wall Street overnight. Better than expected US job data bolstered equities. The US economy added 4.8 million jobs in June, pushing the unemployment rate to 11.1 per cent, down from 13.3 per cent in May. Gold has advanced and the Australian dollar is edging higher.
Local Economic News
We are expecting the Australian Bureau of Statistics will release retail trade figures for the month of May, with analysts expecting a 16.3 per cent fall, following April’s 17.7% decline. The Federal Chamber of Automotive Industries (FCAI) is expected to release data showing the number of new vehicles sold in June. The sale of new vehicles fell over 35 per cent in May – the largest monthly drop since the FCAI began recording the statistics in 1991.
Markets
Wall Street closed higher yesterday: The Dow Jones Industrial Average gained 0.4 per cent, the S&P 500 added 0.5 per cent and the NASDAQ closed 0.5 per cent higher.
European markets closed higher, London’s FTSE added 1.3 per cent, Paris gained 2.5 per cent and Frankfurt closed 2.8 per cent higher.
Asian markets closed higher, Tokyo’s Nikkei gained 0.1 per cent, Hong Kong’s Hang Seng added 2.9 and China’s Shanghai Composite closed 2.1 per cent higher.
Taking all of this into equation, the SPI futures are pointing to a 0.6 per cent gain. Yesterday, the Australian share market closed 1.7 per cent higher at 6033 yesterday.
Company news
The board of Lovisa Holdings (ASX:LOV) has decided to exit the Spanish market. Following the rollout of its Spanish stores, the jewellery retailer experienced disappointing sales results and a lack of support from Spanish landlords. As a result, the company expects to recognise an impairment charge of approximately $3.3 million in FY20. At the end of the financial year Lovisa boasted 434 stores within the franchise. Sales revenue (excluding franchise revenue) for the full year (ended 28 June 2020) came in at $237 million, a drop compared to the $249 million of revenue it achieved the previous financial year. The company began reopening stores in Australia in mid-April and expects a progressive reopening of all its international stores, with the UK stores expected to be the last to re-open in late June. Comparable store sales for the period since stores have re-opened though (based on the actual days each store traded) are down around 30 per cent compared to the previous year. This is partially offset by the company’s 256 per cent growth in online sales during Q4 (compared to the prior year). Shares in Lovisa Holdings (ASX:LOV) closed 5.5 per cent higher at $6.11 yesterday.
Currencies
One Australian Dollar at 6:50 AM was buying 69.27 US cents, 55.56 Pence Sterling, 74.47 Yen and 61.63 Euro cents.
Commodities
Iron Ore futures suggest a 0.1 per cent fall.
Gold has gained $7.10 to US$1787 an ounce.
Silver was up 5 cents to US$18.27 an ounce.
Oil has added $0.47 to US$40.29 a barrel
Copyright 2020 – Finance News Network
Source: Finance News Network
