A marked acceleration in LPP’s revenue growth. Both sales channels recorded double-digit growth in the second quarter of 2026.

• The LPP Group’s revenue in the second quarter of 2026 increased by 18% year-on-year in constant currencies, reaching PLN 6.6bn. This result was driven by double-digit sales growth across both channels, including improved growth in like-for-like stores and the continued expansion of the network.
• In the brick-and-mortar channel, sales rose by 18.6% year-on-year. Meanwhile, between May and the end of July, 230 new stores were opened, including 212 Sinsay stores, bringing the total number of locations to over 4,000. Across the entire LPP network, nearly 2,700 stores are now Sinsay outlets.
• E-commerce boosted revenue by 16.4% year-on-year. The improvement in online performance was supported by the restoration of full logistics capacity in South-Eastern Europe, including the launch of a new distribution centre in Romania in July this year.
• The growing scale of sales was accompanied by a marked improvement in the gross margin of 3.7 pp year-on-year to 57.7%. Higher sales profitability, supported by strong demand, translated into a good net profit of PLN 768m, 48% higher than a year earlier.
• Investments in logistics infrastructure are supporting further business expansion. Capital expenditure in the second quarter totalled PLN 506m, of which PLN 150m was allocated to logistics, increasing the capacity to serve the growing network of brick-and-mortar stores and online sales.
• In view of the stronger sales growth in the first half of the year, LPP is updating its targets for the end of 2026, raising the expected gross margin to the range of 56.5–57%, the EBITDA margin to 24.0–25.0% and the net profit margin to 10.0–11.0%.

The second quarter of 2026 saw a marked recovery in sales for the LPP Group. Revenue rose by 18% year-on-year in constant currencies to PLN 6.6bn, compared with the 11% growth recorded in the first quarter. This result confirms the positive trend that the company had already signalled at the beginning of May. The pace of growth not only accelerated compared with the first few months of the year, but was also achieved against a high baseline – in the same period a year earlier, sales had risen by 17% year-on-year.

At the same time, the growth in business scale was accompanied by a marked improvement in the gross margin, up by 3.7 pp year-on-year to 57.7%, which translated into higher results across the board – EBITDA rose by 42% year-on-year to PLN 1.7bn, EBIT by 57% year-on-year to PLN 1.1bn, and net profit by 48% year-on-year to PLN 768m. The result was supported by a favourable USD/PLN exchange rate, lower freight rates and improved management of the product range and pricing.

As a result, after the first half of 2026, the Group’s revenue was 15% higher year-on-year and exceeded PLN 12bn, confirming the improvement in business momentum as the year progressed.

– In the second quarter, we observed a more favourable sales environment compared with the start of the year. Consumer sentiment in key markets stabilised, and interest in our brands’ collections grew not only thanks to new store openings but also in our existing stores. We are also pleased to see e-commerce return to double-digit growth. From our perspective, the most important thing is that the acceleration in revenue is not currently based on a single source – expansion, like-for-like sales and the online channel are all contributing to it simultaneously. This growth structure gives us greater resilience to fluctuations in individual segments and builds a stronger foundation for further scaling of the business – comments Marcin Bójko, LPP’s Vice-President for Finance.

E-commerce returns to double-digit growth

The most noticeable change compared with the previous quarter occurred in online sales. At the start of the year, growth was hampered by temporary logistical difficulties in South-Eastern Europe, resulting from a warehouse fire in Romania. In July this year, the Group launched a new distribution centre in that country, restoring full logistical capacity in the region. As a result, e-commerce sales – further bolstered by an increased budget for performance marketing – rose by 16.4% year-on-year in the second quarter, maintaining double-digit growth across all regions. The strengthening of mobile apps, whose share of online sales is steadily growing, also had a positive impact on e-commerce results – the mobile channel now accounts for 84% of online purchases at Sinsay and 63% at Reserved.

In-store sales are rising

In parallel with the online channel, sales in high-street stores maintained double-digit growth, rising by 18.6% year-on-year. This was supported by the consistent expansion of the retail network – in the second quarter, the Group opened 230 new stores, including 212 Sinsay stores, thereby exceeding the 4,000-store mark. Throughout the first half of 2026, LPP’s high-street network expanded by 351 new locations, including 314 Sinsay stores.

This positive trend was evident across all the Group’s key markets. Overseas sales rose by 22.2% year-on-year – faster than in Poland, though in both cases the growth rate remained in double figures. Particularly strong results were recorded in Eastern Europe and Central Asia, which are increasingly driving the Group’s overall growth.

Operational initiatives implemented by the Sinsay brand

Part of this acceleration is the result of measures launched at Sinsay at the start of the year, the first results of which were visible in the second quarter. The brand adopted a ‘back to fashion’ formula and a ‘smart value’ model, combining attractive prices with quality and design, whilst purchasing decisions were accelerated through the use of AI algorithms and the active reordering of best-selling products.

At the same time, Sinsay enhanced the in-store shopping experience, including by improving product displays and expanding its network of self-service checkouts, which are now available in 20% of the brand’s stores. The changes also extended to the home section in around 10% of stores in Poland. Online sales, in turn, were supported by an increase in the performance marketing budget, which resulted in higher customer traffic and accelerated sales growth from the start of the quarter.

– We are returning to the growth trajectory that we consider appropriate for the scale of our business. Sinsay is currently on the right track, and the measures we are systematically implementing are beginning to yield initial results in terms of both our product range and operations. At the same time, the marketplace launched in August opens up a new avenue for growth for the brand – it broadens the product range and diversifies revenue streams. As a result, Sinsay can grow not only through further store openings and sales of its own collections, but also through the development of the platform and the monetisation of its growing customer base. We anticipate that as the marketplace scales up in 2027, its impact will also be felt at the EBITDA level – comments Marcin Bójko.

Investments to drive further sales growth

The development of a broad sales ecosystem requires a parallel expansion of the logistics infrastructure. In the second quarter, LPP consistently implemented its investment plan, allocating a total of PLN 506m to development. Most of the funds went towards further expansion of the retail network, mainly Sinsay, and logistics. PLN 279m was allocated to new stores, and PLN 146m to logistics projects, including the expansion of the distribution centre in Brześć Kujawski, the e-commerce warehouse in Tczew and automation. Since the start of the year, LPP’s total capital expenditure has already exceeded PLN 1bn.

Outlook for the second half of the year and revised targets for 2026

– The start of the third quarter is giving us positive signs. The Back-to-School season has brought double-digit growth in both children’s and youth’s collections, with the online channel performing particularly strongly. This shows that our range is responding well to customers’ needs at the start of the season. However, we have some crucial weeks ahead of us with the autumn-winter collections and Black Friday, so it will be important to maintain this momentum in the coming months – comments Marcin Bójko.

The first-half results have enabled the Group to raise its profitability expectations. LPP is maintaining its core business sales target at around PLN 26–27bn and its capital expenditure target at PLN 2.5bn. However, it is raising its forecast for the gross profit margin to 56.5–57.0% from the previous 56.0%, the EBITDA margin to 24.0–25.0% from 23.5–24.5%, and the net profit margin to 10.0–11.0% from 9.5–10.5%.

_________________________________

LPP is a Polish family business and one of the fastest growing clothing companies in the region of Central Europe. For 30 years, it has been successfully designing and selling the collections and accessories in Poland and abroad. LPP manages five fashion brands: Reserved, Cropp, House, Mohito, and Sinsay, whose offer is available today in stationary and online stores in 47 markets worldwide. The company has a chain of over 4,000 stores with the total area of over 3 million m2 and distributes the products to 3 continents every year. LPP also plays an important role as it provides employment to nearly 63 thousand people in its offices and sales structures in Poland, Europe, Asia, and Africa. The company is listed on the Warsaw Stock Exchange in the WIG20 index and belongs to the prestigious MSCI Poland index.