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Investing.com -- Shares of Polish fashion retailer LPP (WA:LPPP) rose more than 3% on Thursday after the company reported a 15% year-over-year increase in first-quarter revenue, led by gains in both online and traditional sales channels, with Sinsay contributing the largest share.
Revenue for the quarter ended April 30 reached PLN 4.95 billion, up from PLN 4.31 billion a year earlier. In-store sales rose 19.9%, supported by the opening of 136 new locations and a 4.3% increase in like-for-like sales.
Online sales increased 25.1% to PLN 1.45 billion, accounting for 29.2% of total revenue, compared with 26.9% in the prior-year period.
Sinsay posted PLN 2.75 billion in sales, a 30.8% increase and the largest contribution among LPP’s five brands.
Reserved generated PLN 1.39 billion, up 22%. Cropp and Mohito saw declines of 6.7% and 5.5%, respectively.
Domestic revenue rose 17.6% to PLN 2.22 billion. Sales outside Poland totaled PLN 2.73 billion, a 25% increase.
LPP reported no sales through trade agents during the quarter, compared with PLN 232 million in the same period last year.
The change followed the conclusion of a transitional agreement related to the divestment of Re Trading.
Gross margin was 54%, up from 52.1%. On a comparable basis, excluding prior-year trade agent activity, the margin declined 1.1 percentage points due to deeper promotions and a higher share of lower-margin Sinsay sales.
Operating costs rose 19.5% to PLN 2.18 billion, driven by new store openings and logistics. Store-related costs totaled PLN 1.22 billion.
Headquarters and e-commerce costs reached PLN 957 million. Costs per square meter declined 2.1% to PLN 295.
Operating profit increased 12.9% to PLN 464 million. Net profit rose 19.9% to PLN 332 million, with a net margin of 6.7%, up from 6.4% a year earlier.
Capital expenditure more than doubled to PLN 613 million, led by PLN 293 million in logistics spending. Inventory grew 50.1% to PLN 4.79 billion, with stock levels rising ahead of planned store openings and online channel support. Inventory per square meter increased 23.4%.
Cash and equivalents totaled PLN 651 million at quarter-end. Deposits and mutual funds reached PLN 992 million.
Net debt rose 48.9% to PLN 5.39 billion, as short-term loans climbed to PLN 1.87 billion from PLN 191 million. Long-term loans decreased to PLN 170 million from PLN 478 million.
During the quarter, LPP entered Kosovo and Albania with new Sinsay stores, expanding its operations to 42 countries.
The company paid a PLN 330 per share advance dividend on April 30 for the 2024 financial year and has recommended a final dividend of the same amount.
LPP remains subject to regulatory reviews. The Polish Financial Supervision Authority is investigating disclosure practices related to a 2020 asset sale.