LPP Group: Q1 revenue up 10.5 percent despite sales growth miss

Polish fashion retailer LPP Group has reported a 10.5 percent year-over-year (YoY) increase in revenue for the first quarter of 2026, reaching 5.5 billion Polish zloty (1.50 billion dollars). The growth was primarily driven by the ongoing expansion of the brick and mortar retail chain, particularly the Sinsay brand, alongside an increase in total commercial floorspace.

However, the rate of sales growth fell below initial company expectations due to unseasonably low temperatures at the start of the spring/summer 2026 season. February and April recorded temperatures below long-term averages, restricting consumer demand for early summer collections. Consequently, LPP recorded a 2.8 percent decline in like-for-like (LFL) sales for the period.

Brand performance and omnichannel development

Performance varied significantly across the corporate brand portfolio. Positive LFL growth was driven by 14.6 percent increase at House, 3.1 percent at Reserved and 0.7 percent at Cropp.

Conversely, negative LFL ratios were registered by Sinsay at minus 6.8 percent and Mohito at minus 15.5 percent.

Despite the LFL drop, Sinsay remained the largest revenue contributor, generating 3.13 billion Polish zloty, which represents a 13.9 percent YoY increase. Traditional brick and mortar sales for the group rose by 15 percent YoY, supported by 121 new store openings, 102 of which belonged to Sinsay.

Online sales grew by a modest 0.7 percent YoY to 1.46 billion Polish zloty. The e-commerce channel remained impacted by prolonged order fulfillment times in South-Eastern Europe, stemming from a warehouse fire in Romania in June 2025. Additionally, a strategic reduction in performance marketing spend to prioritise online profitability compressed e-commerce to a 26.6 percent share of group revenue, down from 29.2 percent in the prior year.

Geographically, international sales outpaced domestic growth, increasing 13.9 percent YoY to account for 56.8 percent of total omnichannel revenues, with Romania, Ukraine, the Czech Republic, and Hungary emerging as top-performing markets.

Record gross margin and rising operating profits

LPP achieved a record gross profit margin for a first quarter, rising by 4.5 percentage points YoY to 58.5 percent. This profitability milestone was reached despite an increasing volume of lower-margin Sinsay products.

Driven by strong margin performance, operating profit (EBIT) grew by 47 percent to 688 million Polish zloty, resulting in an EBIT margin of 12.6 percent. Total net profit for the quarter closed at 475 million Polish zloty, up from 335 million Polish zloty in the prior year period.

Technical investments and future targets

During the first quarter, LPP accelerated its logistics automation strategy by expanding its autonomous robot fleet more than sixfold to over 3,500 units across Poland and Romania. The group also initiated the construction of a new e-commerce fulfillment centre in Tczew, scheduled to open in the first quarter of 2027.

For the full 2026 financial year, LPP targets total sales of approximately 26 billion to 27 billion Polish zloty, backed by a planned 15 percent increase in retail floorspace that includes around 750 new Sinsay stores. The group projects a full-year gross margin of roughly 56 percent and capital expenditure of 2.5 billion Polish zloty.

Looking further ahead to 2027, the company forecasts revenues to reach between 30 billion and 31 billion Polish zloty. In addition, during the years 2028–2029, the company aims to open around 750 new Sinsay stores in 2028, and around 300-350 per year from 2029 onwards and anticipates positive LFL growth, and 15–20 percent growth in online sales.