Shares in fashion accessory chain Lovisa are being crushed

Image: Lovisa

Investors punished Lovisa after the fashion jewellery and hair accessory group issued a disappointing full year earnings guidance.

A short time ago, the shares were down more than 30% to $2.51.

Revenue was up more than 13% to $82.6 million, net profit rose 3.4% to $17.9 million and 11 new stores were opened in the first half of 2016.

However, margins are being squeezed by an increase in the cost of goods due to a falling Australian dollar against the US dollar.

Lovisa, which started in 2015 and now has 180 stores in six countries, said it expects to achieve full year EBIT (earnings before interest and tax) in the range of $23.5 million to $25.5 million.

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