2 ASX shares to buy and hold for the next decade!

Buying and holding great ASX shares could be one of the best financial decisions an Australian can make in 2026 due to the powerful effects of compounding.

It's easier to stick with an investment for the long-term if it has communicated its long-term expansion plans to investors. This provides a good tailwind for earnings growth over time.

The two companies I'm about to highlight both want to become much larger, which could give them significant economies of scale (boosting margins) and increase revenue. Excitingly, both are tapping into international markets to unlock further growth.

Guzman Y Gomez Ltd (ASX: GYG)

GYG is a leading quick service restaurant company, offering higher-quality/healthier food than competitors but with the same rapid order fulfilment.

It already has more than 225 locations in Australia with plans to reach 1,000 in two decades. In a decade from now, the company should be well on its way to that Australian target.

When a business has significant location expansion plans, I think it's important to see that sales growth at each individual store/restaurant is still positive, or else the expansion may be impacting the profitability of the individual locations. In the first quarter of FY26, the ASX share saw 4% comparable sales growth in the Australia segment (including Singapore and Japan).

As GYG becomes larger, I'm expecting its operating profit (EBITDA) to network sales margin to increase, which could help the bottom line substantially.

I also think the market is underestimating how much profit the international division could contribute in five or ten years. At the latest count, it had 22 restaurants in Singapore, five in Japan and seven in the US.

GYG's network sales are growing rapidly – in the first quarter of FY26, total network sales increased 18.6% to $330.6 million. That included 29% Asian network sales growth to $20.8 million and 65% US network sales growth to $4.3 million.

Broker UBS forecasts the ASX share could generate $22 million of net profit in FY26 and $125 million of net profit by FY30, with company revenue potentially doubling during that period.

Lovisa Holdings Ltd (ASX: LOV)

Lovisa is a leading retailer of affordable jewellery, with a focus on younger shoppers. It has more than 200 stores across Australia and New Zealand.

But, more impressively, the business has more than 1,075 stores across more than 50 markets. The ASX share has more than 15 stores in countries like the US, Australia, France, South Africa, the UK, Germany, Malaysia, New Zealand, Canada and Poland.  

At the AGM update in November, Lovisa reported that its store count had increased 148 year-over-year. Global total sales for the first 20 weeks of FY26 were up 26.2% year-over-year, with global comparable store sales growth of 3.5%.

If Lovisa's margins stay consistent (or grow) then its net profit could scale at a pleasing pace and help deliver a satisfactory share price and dividend performance in the coming years.

Broker UBS forecasts Lovisa could achieve $942 million of revenue and $102 million of net profit in FY26, which could grow to $1.35 billion of revenue and $168 million of net profit in FY30. That suggests approximately 65% net profit growth in four years.

If the ASX share can continue opening profitable stores in international markets over the next decade, then I'd say the Lovisa share price is substantially undervalued.

The post 2 ASX shares to buy and hold for the next decade! appeared first on The Motley Fool Australia.

Motley Fool contributor Tristan Harrison has positions in Guzman Y Gomez. 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.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2025