LPP Q1 Profit Rises 42% as Sinsay Drives Expansion and Higher Margins
Financial Performance and Strategic Developments
Q1 Profit and Revenue Growth
June 11 (Reuters) - Poland's largest fashion retailer LPP reported a near 42% rise in first-quarter net profit on Thursday, helped by stronger sales and wider margins as its low-cost Sinsay brand drove growth.
Brand Portfolio and Growth Strategy
LPP's brand portfolio includes its flagship label Reserved and discount-focused Sinsay, which has become central to its growth plan. The company has been pursuing international expansion through Sinsay while investing in technology, including AI.
Key Financial Highlights
- Quarterly revenue rose by over 10%, while gross margin grew by 4.5 percentage points to 58.5%, in line with preliminary figures
- LPP attributed the margin rise to a stronger zloty against the dollar, lower freight costs, and fewer winter discounts due to a cold February
- The group's revenue rise was driven by a 15% increase in physical store sales, with its core Sinsay brand accounting for the majority of the absolute growth
- Online sales grew 0.7%, hampered by a warehouse fire in Romania that disrupted e-commerce in South-Eastern Europe, the retailer's largest market outside Poland
Store Expansion and Revenue Targets
- The retailer cut its 2026 store opening target for Sinsay to 750 from an original plan of 950
- For 2026, LPP now targets revenue of 26-27 billion zlotys ($7-$7.3 billion) versus 28-29 billion zlotys previously
- In 2027, the retailer expects revenue to reach 30 to 31 billion zlotys with a gross margin between 55% and 56%
- The group said second-quarter constant-currency sales rose 20% between May 1 and June 9
Currency and Market Context
($1 = 3.6933 zlotys)
Reporting Credits
(Reporting by Rafal Nowak; Editing by Matt Scuffham)
