VRG (VRG) Q1 2025 earnings summary

Executive summary

• Group revenues in 1Q25 rose 5.5% YoY to PLN 293.6m, with both apparel and jewellery segments contributing to growth.

• Net profit increased 171.5% YoY to PLN 6.0m, with net margin improving to 2.0% from 0.8% in 1Q24.

• Gross profit margin improved by 0.6pp YoY to 54.3%, driven by lower discounting in apparel.

• Online sales grew 10.9% YoY, reaching 16.3% of group revenues in 1Q25.

• The Group continued optimizing its retail network, closing unprofitable apparel stores and expanding the jewellery segment's footprint.

Financial highlights

• Apparel segment revenues up 6.3% YoY to PLN 129.9m; jewellery segment up 4.9% YoY to PLN 163.7m.

• Group EBIT rose to PLN 3.7m (IFRS16), up 37.9% YoY; EBITDA at PLN 37.9m, up 4.9% YoY.

• Gross profit on sales reached PLN 159.3m (+6.6% YoY); apparel segment margin at 57.1% (+2.0pp YoY), jewellery at 53.9% (-0.6pp YoY).

• Operating costs per m2 increased 13.1% YoY, mainly due to higher salaries, rental indexation, and online costs.

• Net debt rose to PLN 144.7m at end-1Q25 from net cash of PLN 50.8m a year earlier; net debt/EBITDA increased to 1.7.

Outlook and guidance

• Focus on revenue growth in both segments, margin improvement, and cost control.

• Planned capex for 2025 at c. PLN 41m, with emphasis on jewellery network expansion and apparel store renovations.

• Management targets improved apparel segment profitability and higher jewellery operating profit.

• No dividend recommended for 2024 to support further development and investments; all profits to be allocated to reserve capital.

• The Group does not publish financial forecasts for 2025.