LPP (LPP) Q1 25/26 earnings summary

Executive summary

• Achieved strong profit growth in Q1 2025, with EBITDA nearing PLN 1 billion and 18% year-over-year growth, supported by disciplined cost management and robust sales in both physical stores and e-commerce.

• Total sales grew 24% year-over-year in constant currency, with e-commerce up 27% and Sinsay as the top-performing brand, contributing 56% of revenues and growing 30.8% year-over-year.

• Opened 136 new stores, including significant Sinsay expansion in Albania and Kosovo, expanding presence to 42 countries.

• Strategic focus remains on quality and profitability, with a temporary pause to assess the smallest Sinsay store format for optimization.

• Paid out over PLN 600 million in dividends by end of April, with a proposed annual dividend of PLN 660 per share (+8% YoY).

Financial highlights

• Revenue grew by 24% year-over-year to PLN 4.95 billion in Q1 2025, with net profit reaching PLN 332 million (+20% YoY).

• EBITDA was PLN 938 million (+18% YoY), EBIT PLN 464 million (+13% YoY), and net margin at 6.7%.

• Gross margin was 54%, up 1.9 percentage points year-over-year, but 1.1pp lower on a comparable basis due to higher Sinsay share and deeper promotions.

• Online sales accounted for 29.2% of group revenue, up from 26.9% in 1Q24.

• Inventory increased 50.1% year-over-year to PLN 4,786 million, reflecting preparation for new store openings.

Outlook and guidance

• Reduced annual store opening target from 1,500 to 1,200 due to market conditions and a focus on quality over quantity.

• Full-year 2025 revenue expected at PLN 23–26 billion, with 25–30% YoY increase in floorspace, mainly for Sinsay.

• Gross margin forecasted at 53–54%; operating costs to sales ratio targeted at 41–42%.

• Capex for 2025 updated to PLN 3.1 billion, with net debt/EBITDA target at 1.6x.

• Early 2Q sales impacted by unseasonably low temperatures, with May–June sales up 13% in constant currencies.