LPP Group: Increase in sales in the first quarter

The Polish fashion retailer LPP Group has reported a 10.5 percent increase in sales for the first quarter of 2026 compared to the previous year.

Sales reached 5.5 billion Polish zloty (approximately 1.3 billion euros. The growth was driven primarily by the ongoing expansion of the stationary retail network. In particular, the Sinsay brand and the expansion of the total sales area contributed to this.

However, the revenue growth rate fell short of the company’s initial expectations. The reason for this was unusually low temperatures at the beginning of the spring/summer 2026 season. In February and April the temperatures were below the long-term average values. This dampened demand for early summer collections. As a result, LPP recorded a 2.8 percent decline in like-for-like (LFL) sales.

Brand performance and omnichannel development

Performance varied significantly within the brand portfolio. House recorded positive LFL growth with an increase of 14.6 percent; Reserved with 3.1 percent and Cropp with 0.7 percent. Negative LFL values, however, were recorded at Sinsay at minus 6.8 percent and at Mohito at minus 15.5 percent.

Despite the LFL decline, Sinsay remained the biggest revenue generator. The brand generated 3.13 billion Polish zlotys, an increase of 13.9 percent year-on-year. The group’s stationary sales increased by 15 percent year-on-year. This was supported by 121 new store openings, 102 of which were in Sinsay.

Online sales grew moderately by 0.7 percent year-on-year to 1.46 billion Polish zloty. The e-commerce channel continued to suffer from extended delivery times in Southeastern Europe. The cause was a warehouse fire in Romania in June 2025. In addition, a strategic reduction in performance marketing spending to prioritize online profitability led to the e-commerce share of group sales falling to 26.6 percent. In the previous year this was 29.2 percent.

Geographically, international sales exceeded domestic growth. They increased by 13.9 percent year-on-year and accounted for 56.8 percent of total omnichannel sales. Romania, Ukraine, the Czech Republic and Hungary developed into the strongest markets.

Record gross profit margin and increasing operating profits

LPP achieved a record first quarter gross profit margin. This rose by 4.5 percentage points year-on-year to 58.5 percent. This profitability milestone was achieved despite a growing share of lower-margin Sinsay products.

Driven by the strong margin development, operating earnings before interest and taxes (EBIT) rose by 47 percent to 688 million Polish zloty. The EBIT margin was 12.6 percent. Net profit for the quarter amounted to 475 million Polish zloty. In the same period last year it was 335 million Polish zloty.

Technical investments and future goals

In the first quarter, LPP accelerated its logistics automation strategy. The fleet of autonomous robots has increased more than sixfold to over 3,500 units in Poland and Romania. The group also began construction of a new e-commerce fulfillment center in Tczew. The opening is planned for the first quarter of 2027.

For the entire 2026 financial year, LPP is targeting total sales of around 26 to 27 billion Polish zloty. This will be supported by a planned expansion of sales area by 15 percent, including around 750 new Sinsay branches. The group forecasts an annual gross profit margin of around 56 percent and capital expenditure of 2.5 billion Polish zloty.

Looking to 2027, the company expects sales of between 30 and 31 billion Polish zlotys. In addition, the company plans to open around 750 new Sinsay branches in 2028 to 2029. From 2029 onwards, around 300 to 350 branches will be added annually. In addition, positive LFL growth and online sales growth of 15 to 20 percent are expected.