Polish fashion retailer LPP reported stronger first-quarter results, with revenue rising 11 per cent year on year in constant currencies to PLN 5.5 billion. EBITDA increased 36 per cent to PLN 1.3 billion, while EBIT climbed 47 per cent and net profit rose 42 per cent from the same period last year.
Marcin Bojko, LPP’s vice president for Finance, said the fifth consecutive quarter of improved profitability showed that the effects of measures in operational agility, cost control and inventory optimisation were sustainable.
This LPP quarterly performance was delivered despite weaker demand for seasonal collections during colder periods in February and April. Strong sales in March helped offset that impact.
Margin performance reaches a record first-quarter level
The company said it maintained high operational efficiency during the quarter, supported by favourable purchasing conditions, including a stronger zloty against the US dollar and lower freight costs.
Gross margin growth remained a key feature of the quarter. The gross margin reached a record 58.5 per cent, marking the highest first-quarter level in the company’s history. The result was also supported by effective pricing strategies across its brands.
The LPP quarterly performance also reflected continued focus on profitability as the business balanced sales conditions with cost discipline.
Store expansion continues, led by Sinsay
The group continued its store expansion during the quarter, opening 121 new stores. Of these, 102 were added under the Sinsay brand, which remained the main growth driver.
Following these additions, the group’s total retail space surpassed 3 million square metres. The pace of store expansion underlined the company’s ongoing focus on scaling its physical retail network while maintaining a selective approach.
Investment supports logistics and e-commerce sales
Capital expenditure in the quarter totalled PLN 562 million. The company invested PLN 252 million in store network expansion and PLN 276 million in logistics infrastructure.
These logistics investments included the expansion of the Brzesc Kujawski distribution centre, warehouse robotisation, and construction of a new fulfilment centre in Tczew to strengthen international e-commerce operations.
E-commerce sales accounted for 26.6 per cent of total revenue in the quarter. In South-Eastern Europe, e-commerce sales were affected by temporary logistical disruptions linked to a warehouse fire in Romania in June 2025. The company expects logistics capacity in the region to improve with the launch of a new distribution centre in July 2026.
Trading improves after quarter-end
After the quarter ended, the company reported a strong recovery in trading. Omnichannel sales growth reached 20 per cent between May 1 and June 9, supported by warmer weather that lifted demand.
This improvement added to the overall LPP quarterly performance as trading conditions became more favourable after the colder months earlier in the period.
Revenue outlook revised, profitability guidance raised
Reflecting a more selective expansion strategy and current market conditions, the company revised its 2026 revenue forecast to approximately PLN 26-27 billion, compared with its earlier estimate of PLN 28-29 billion.
At the same time, it raised its profitability expectations. It now forecasts a gross margin of around 56 per cent, an EBITDA margin of 23.5-24.5 per cent, and a net profit margin of 9.5-10.5 per cent.
Looking ahead, the company plans to continue expanding Sinsay while keeping its focus on profitability and selective site selection. It expects the brand to open around 750 stores in 2028, with annual openings stabilising at 300-350 stores from 2029 onwards. It also anticipates e-commerce sales growth of 15-20 per cent annually, supported by further market expansion and omnichannel development.
