2 ASX stocks with impressive global growth plans: experts

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There are many ASX stocks that focus solely on the domestic economy.

names like Commonwealth Bank of Australia (ASX:ABC), Woolworths Group Ltd. (ASX:WOW) and Telstra Corporation Ltd. (ASX:TLS) derive most of their profits from Australia.

But some companies make a lot of money overseas and plan to generate even more revenue from international sources.

Here are two ASX stocks with global growth intentions.

Lovisa is an affordable jewelry retailer, primarily aimed at a younger audience.

It is liked by several brokers, including Macquarie, who consider it a buy with a price target of $24.90. This implies a potential increase in the Lovisa share price of nearly 40% over the next year.

The broker noted growth in store count, sales and margins, with continued growth in the second half of fiscal 2022.

In the first half, ASX stock opened 42 new stores, rising to 586 at the end of the period. Total revenue increased 48.3% to $217.8 million, while gross profit increased 50.5% to $170.7 million. Net income after tax (NPAT) increased 70.3% to $36.7 million.

ASX’s growth share has over 20 stores in Australia, New Zealand, Malaysia, South Africa, UK, France, Germany, USA and the Middle East. It entered two new markets during the period – Cyprus and Lebanon.

The United States is already its second largest store network. It opened 18 new stores in the United States during the period, and now operates in 19 states.

In the first eight weeks of the second half of FY22, total sales increased 61.7% year-over-year.

Despite this, Lovisa’s share price is down 10% since the start of the year.

According to figures from Macquarie, Lovisa’s share price is valued at around 30 times estimated FY23 earnings.

City Chic Collective Ltd (ASX: CCX)

City Chic is a leading retailer of plus size clothing, footwear and accessories for women.

In Australia, it has a nationwide network of City Chic stores. But, it also has several other brands in different markets. For example, in the United States, it operates the Avenue website. In the UK, it operates the Evans website. Also in the northern hemisphere, it has a number of partnerships where its products are sold by other retailers.

City Chic’s stock price has crashed in 2022, down about 40% since the start of the year.

Many brokers are pricing this ASX growth share as a buy, including Ord Minnett. This broker’s price target is $5.20, a potential upside of around 60% over the next year if the broker ends up being right.

The broker noted the strong level of sales growth in the first six months of FY22, despite the impacts caused by COVID-19, including the loss of commercial store doors and other factors.

In HY22, revenue increased 49.8% to $178.3 million. Despite all the negative impacts of this result and the $10 million of COVID-related “austerity measures” in the prior period, it increased underlying earnings before interest, taxes, depreciation and amortization (EBITDA) 1% to $23.5 million.

Entering the second half of FY22, the ASX share continued to deliver revenue growth. It reported a surge in the US, UK and Europe. City Chic said it is also developing new programs, launching new lines with existing partners and integrating new partnerships.

According to Ord Minnett, City Chic’s share price is valued at 19 times estimated FY23 earnings.

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