Polish apparel retailer LPP reports strong second quarter results

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Polish clothing manufacturer and retailer, LPP has reported a 71.1 per cent revenue jump to PLN 3.6 billion (Polish zloty) in the second quarter (Q2) of FY22 ended on July 31, 2021, over the revenue of PLN 2.1 billion in the same period of prior fiscal. The group’s net profit for the quarter accelerated to PLN 459.0 million (Q2 FY21: loss PLN 30.6 million).

Polish clothing manufacturer and retailer LPP has reported a 71.1 per cent revenue jump to PLN 3.6 billion (Polish zloty) in the second quarter (Q2) of FY22 ended on July 31, 2021, over the revenue of PLN 2.1 billion in the same period of prior fiscal. The group’s net profit for the quarter accelerated to PLN 459.0 million (Q2 FY21: loss PLN 30.6 million).

“In recent months, we have benefited from the effects of deferred demand. Customers missed shopping in brick-and-mortar stores, and our collections fit their expectations well. We have also recorded increases in e-commerce, which are now lower – double-digit, but taking into account the sharp jumps in sales in this channel from last year, this trend is still high,” Przemyslaw Lutkiewicz, vice president of LPP, said in a press release.

Sales across all the brands surged during the three-month period. Reserved recorded sales of PLN 1.4 billion (0.9 billion), while Sinsay sales more than doubled to PLN 1.0 billion (0.4 billion). Moreover, Cropp brand’s sales rose to PLN 0.4 billion (PLN 0.2 billion), and Mohito went up to PLN 0.3 billion (PLN 0.2 billion).

“The market conditions and the related relatively low purchase costs of goods also had a positive impact on sales, as we placed orders for the spring/summer 21 collection in 2020, during the height of the crisis. Thanks to this, we were able to end the first half of the year with a very good result. However, our enthusiasm fades somewhat in the coming quarters,” Lutkiewicz continued.

Regionally, sales from Poland increased to PLN 1.5 billion (PLN 0.9 billion), while other European countries sales totalled to PLN 1.1 billion (PLN 0.7 billion). CIS region reported sales of PLN 1.0 billion (PLN 0.5 billion).

Operating profit for Q2 FY22 improved to PLN 595.0 million (PLN 32.3 million), and gross profit on sales was PLN 2.0 billion (PLN 1.0 billion).

“There are many challenges ahead of us, including with delays in the delivery of containers with goods and a large increase in transport costs, significantly higher production prices, resulting from the rising prices of cotton and raw materials, the unavailability of RFID chips, computers and materials for building stores. We are also concerned about recently reported downtime in Chinese factories due to power cuts,” Lutkiewicz added.

“We are strengthening our position on the markets with the highest sales potential. We can see that this strategy is justified in the sales results – our position on foreign markets is getting stronger, which is reflected in the nearly 60 per cent share of exports in the group’s revenues. However, we are concerned about the exacerbating situation of the increase in the number of infections worldwide, which in many countries may soon result in the restoration of the blockade of stationary sales,” Lutkiewicz said in the release.

Fibre2Fashion News Desk (JL)

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