Polish fashion retailer LPP confirms annual revenue goal of up to $5.5 billion

GDANSK (Reuters) - Poland's largest apparel retailer LPP confirmed its full-year revenue target of 20-21 billion zlotys ($5.2-5.5 billion) on Wednesday after posting a flat second-quarter net profit, as rising costs of stores and distribution offset higher sales.

BY THE NUMBERS

Second-quarter net profit edged up a little over 1% to 444 million zlotys from a year earlier, with sales up 9% to 5.01 billion zlotys.

The modest uptick was offset by a 27% jump in the costs of stores, distribution, and overheads to more than 2 billion zlotys, with the company citing the development of its store network, logistics spending and personnel costs.

OUTLOOK

The group expects third-quarter sales to rise 32% year on year on a constant currency basis

The group remains optimistic about third quarter after it posted a 32% year on year rise in sales on a constant currency basis in the period from Aug 1 until Sept 20.

It also plans to open 140 new stores in the three-month period.

WHY IT'S IMPORTANT?

LPP, the biggest retailer in Poland, is rapidly expanding into European markets, especially in the Central-Eastern and Southern Europe regions, which accounted for a third of total revenue in the second quarter.

CONTEXT

The expansion comes after the company sold its Russian business in June 2022, after Russia invaded Ukraine.

($1 = 3.8291 zlotys)

(This story has been corrected to say that the company posted a 32% rise in sales between Aug 1 and Sept 20, and not that it expects a 32% rise in its third quarter sales, in paragraph 4)

(Reporting by Mateusz Rabiega; Editing by Kirsten Donovan)