Poland-based fashion retailer LPP has announced positive Q2 results, with its sales network expansion in Europe, strong profitability, and cost discipline being the driving factors. The company’s Q2 revenues increased by 5.4% to PLN4.5 billion, although this growth rate was slightly slower than the nearly 20% growth seen in the previous quarter. Overall, the first half of the year witnessed an 11% increase in revenues.

LPP attributes its growth to its effective use of omnichannel capabilities in almost 40 markets, as well as the opening of 81 new stores in Poland and abroad. These new store openings resulted in a growth of over 25% in the group’s retail space between May and July. Moreover, physical store sales also witnessed a rise of over 10% during this period.

Although online sales experienced a 12% decline compared to Q2 2022, LPP reported that they still exceeded PLN1 billion, making up a significant portion of its total revenues. Online sales accounted for 26.1% of revenues from Poland and 23.6% overall. The company emphasized the importance of online sales for its international growth and expects improvements in the second half of the year.

LPP’s net profit surged by over 90% thanks to stable sales and consistent cost discipline. Sales outside of Poland continued to grow, representing 58% of turnover during the quarter. The company’s Mohito and Sinsay labels experienced high-double-digit growth, with Sinsay benefiting from the popularity of its value-for-money products and expansion into smaller towns. On the other hand, Mohito, operating at a higher price range, saw a 13% increase, driven by online sales accounting for over 30% of its revenues.

Following Q2, LPP achieved significant milestones by opening a store in London’s Westfield Stratford City in August, followed by a second store on Oxford Street. The company also has plans to open another location in the Brent Cross shopping centre. LPP is rapidly expanding in Italy and aims to strengthen its presence abroad by increasing its market share in individual countries such as Finland, Greece, Romania, Bulgaria, and Serbia.

Useful links:
1. LPP Investor Relations
2. LPP Company Presentation