LPP (LPP) Q2 25/26 earnings summary

Executive summary

• Achieved double-digit like-for-like growth in key brands, with Sinsay contributing 54% of total revenues and growing 30.2% year-over-year; total revenue for 1H 2025 reached PLN 10.5 billion, up 12.9% YoY, and Q2 revenue was PLN 5.6 billion, up 17% YoY.

• E-commerce sales grew strongly, accounting for up to 26.9% of total sales and 24.9% of group revenue in Q2, with the Sinsay app share in online sales reaching 80%.

• Network expansion continued with 296 new stores opened, mainly Sinsay, and entry into new markets such as Uzbekistan and Albania.

• Maintained cost efficiency, improving SG&A/sales ratio by over 2pp YoY and reducing operational costs per square meter.

• International sales outpaced domestic, accounting for 55.7% of omnichannel revenue.

Financial highlights

• 2Q25 revenue: PLN 5.6bn (+17% YoY); 1H25 revenue: PLN 10.5bn (+12.9% YoY); EBITDA for 1H25: PLN 2,132m (+17.6% YoY); EBIT for Q2: PLN 689m (+13% YoY); Net profit for 1H25: PLN 799m (+11% YoY).

• Gross margin stable at 54.0%, down 1.3pp YoY, mainly due to Sinsay's higher share and increased promotions.

• SG&A costs per m² declined 9.4% YoY; operational cost per square meter decreased to PLN 300-320.

• Net debt/EBITDA at 1.3x; net debt at PLN 5.7bn, with PLN 5.0bn due to leases.

• Capital expenditure for 1H25 totaled PLN 1,248m, with a full-year target of PLN 3.1bn, mainly for store and logistics expansion.

Outlook and guidance

• Full-year 2025 revenue targeted at PLN 23-24bn, with double-digit growth in both traditional and online channels.

• Gross margin expected in the 53-54% range; operating costs to sales ratio at 41-42%; EBITDA margin 19-20%; net margin 7-8%.

• Planned capital expenditure for 2025 is PLN 3.1bn, focusing on Sinsay store expansion and logistics.

• Floorspace to increase by 25-30%, mainly through Sinsay, targeting around 1,100 stores.

• Plans to open 200-250 new stores in Q3 and 400-450 in Q4, mainly Sinsay, with 20-40 new stores for other brands.