Zabka Group (ZAB) Q2 2025 earnings summary

Executive summary

• Sales to end customers rose 14% year-over-year to PLN 8.1 billion in Q2 2025, with like-for-like growth of 6.1% and adjusted EBITDA up 20% to PLN 1,057 million.

• Store network expanded to 11,793 locations, with 804 new stores opened in H1 2025 and upgraded 2025 guidance to over 1,300 new openings in Poland and Romania.

• Continued investment in product innovation, digital initiatives, and retail media, supporting double-digit LFL growth in key categories and rapid growth in Romania.

• Free cash flow exceeded PLN 1 billion in Q2, supporting deleveraging and network expansion.

• Adjusted net profit reached PLN 221 million, up 26% year-over-year, and net debt to adjusted EBITDA improved to 1.2x.

Financial highlights

• Gross profit increased 19% year-over-year to PLN 1,327 million, with gross margin up to 16.3%.

• Adjusted EBITDA margin improved by 0.9 percentage points in core Polish operations and reached 13.0% in Q2.

• Free cash flow conversion remained strong at 137% in H1 2025.

• Net debt/adjusted EBITDA improved to 1.2x, a 0.5x reduction year-over-year.

• Franchisee margin increased to 17.6% of sales to end customers at Żabka stores.

Outlook and guidance

• 2025 guidance raised to over 1,300 new store openings, with closures projected at less than 1% of the network.

• Like-for-like sales growth expected in the mid to high single-digit range for 2025.

• Adjusted EBITDA margin anticipated at the upper end of the 12–13% range, with adjusted net income margin expected to reach 3% in the near term.

• Continued focus on disciplined cost management, network expansion, and adaptation to regulatory changes.