LPP (LPP) Q1 26/27 earnings summary

Executive summary

• Revenue grew 10.5% year-over-year to PLN 5.47 billion in Q1 2026, driven by Sinsay expansion and offline store growth, despite weather-related sales headwinds.

• Opened 121 new stores in Q1 2026, with 102 under Sinsay, which remains the growth engine and focus for further expansion and network optimization.

• Profitability improved at all levels, with net profit up 41.8% to PLN 475 million, EBIT up 47% to PLN 688 million, and EBITDA up 42% to PLN 1.3 billion.

• Maintained strong financial standing, with net debt/EBITDA at 1.2, enabling continued CapEx and dividend payout.

• Proposed a dividend of PLN 1.7bn (+36% YoY), with an interim dividend of PLN 400 per share paid for 2025.

Financial highlights

• Gross margin reached a record 58.5%, up 4.5 percentage points year-over-year.

• EBITDA margin at 23.4% (+4.5pp YoY); EBIT margin at 12.6% (+3.2pp YoY); net margin at 8.7% (+1.9pp YoY).

• Operating costs rose 13.2% YoY due to network expansion and logistics, but costs per square meter fell 8.7%.

• Inventory at quarter-end was PLN 4.4bn, down 7.5% YoY; inventory/m² dropped 25.1% YoY.

• Online sales grew 0.7% YoY, now representing 26.6% of total revenue.

Outlook and guidance

• Guidance for 2026 and 2027 revised downward for revenue due to fewer store openings and logistics challenges; 2026 sales targeted at PLN 26–27 billion, gross margin expected at 56%.

• CapEx for 2026 and 2027 to be lower, reflecting fewer new stores and network optimization.

• Long-term plan targets 10,000 Sinsay stores, with 2,000 more to be added over three years.

• E-commerce growth targeted at 15%-20% annually, with omnichannel synergy emphasized.

• Positive Q2 outlook, with 20% YoY sales growth (constant currency) from May 1 to June 9, 2026.