Fifth consecutive quarter of year-on-year profitability improvement. LPP summarises Q1 2026

• A historically high gross margin and cost discipline have resulted in the fifth consecutive quarter of year-on-year profitability improvement at LPP. In the first quarter of 2026, the company recorded high double-digit growth across all key performance metrics: EBITDA increased by 36% year-on-year to PLN 1.3 billion, EBIT by 47% year-on-year, and net profit by 42% year-on-year.
• The Group’s revenue rose by 11% year-on-year in constant currencies, to PLN 5.5 billion. Sales growth was lower than previously forecast, mainly due to colder temperatures in February and April, which limited demand for seasonal collections. Very strong results in March partially mitigated this effect.
• In the first quarter, LPP opened 121 new stores, including 102 Sinsay stores. The Group’s retail space exceeded 3 million m², with Sinsay remaining the main driver of expansion.
• The Group’s strong financial foundations support further investment in growth. In the first quarter, LPP’s capital expenditure amounted to PLN 562 million, of which PLN 252 million was allocated to the expansion of the sales network, and PLN 276 million on logistics infrastructure, including the expansion of the Distribution Center in Brześć Kujawski, robotisation, and the start of work on a new fulfillment center in Tczew, which will strengthen online sales operations in foreign markets.
• Following the end of the quarter, the company recorded a marked upturn in sales. With the return of warmer weather in early May, omnichannel growth reached 20% (between 1 May and 9 June), providing a positive starting point for the results of the coming period.

The start of the spring-summer season brought relatively low temperatures, particularly in February and April, which limited demand for seasonal stock in the fashion sector. Despite the challenging environment, the LPP Group generated PLN 5.5 billion in revenue, representing an 11% year-on-year increase in constant currencies. Sales growth was below earlier forecasts, but very strong results in March partially offset the impact of weaker months. At the same time, LPP maintained high financial efficiency thanks to a historically high gross margin on sales for the first quarter and consistent cost discipline.

– The first quarter of this year confirmed that LPP is able to respond effectively to changing market conditions and structure its business in a way that strengthens its long-term efficiency. Revenue growth was lower than our projections, but this did not come at the expense of margins or operational discipline. The fifth consecutive quarter of improved profitability shows that the effects of measures taken in the areas of operational agility, cost control and inventory optimisation are sustainable. For us, it is crucial that LPP’s continued growth is not only rapid, but above all profitable and generates long-term value for shareholders – comments Marcin Bójko, LPP’s Vice-President for Finance.

Record gross margin

The gross margin on sales in the first quarter of this year reached 58.5%, marking the highest level in the Group’s history for this period. This result was supported by more favourable purchasing conditions, including a stronger zloty against the dollar and lower freight rates, as well as effective management of pricing policy across all brands. The high margin at the start of the season gave the company greater flexibility regarding markdowns and helped mitigate the impact of a weaker start to seasonal sales on the Group’s profitability.

Online sales performance, particularly in South-Eastern Europe, was affected by temporary logistical constraints linked to a warehouse fire in Romania in June 2025. These resulted in longer delivery times and a temporary reduction in the available product range. Despite this, the e-commerce channel maintained a stable position within the Group’s business structure, accounting for 26.6% of revenue. An e-commerce facility has been operational in Romania since October 2025, and the restoration of full logistics capacity in the region will be supported by the planned launch of a new distribution center in July 2026.

Since the beginning of May, the company has observed a marked upturn in sales, recording high, positive growth rates of up to +20% on an omnichannel basis. The positive trend is expected to be sustained by further strengthening of the Sinsay brand under the smart value formula, based on an attractive price-quality ratio, better alignment of the collection with seasonality and customer needs, and more frequent reordering of top-selling products. The changes will cover the brick-and-mortar network – including strengthening store teams, improving product displays, and further developing self-service checkouts. E-commerce growth will be supported by an increased budget for performance marketing, whilst the home category is expected to provide additional growth potential through better organisation of the core and seasonal ranges and clearer displays in stores.

Scaling expansion whilst maintaining the quality of the network

In the first quarter, LPP opened 121 new stores, including 102 Sinsay stores. The Group’s retail space has already exceeded 3 million m², and Sinsay remains a key brand in its development plans. At the same time, the company is adjusting the pace of new openings to current market and operational conditions, placing greater emphasis on the long-term quality of expansion and the profitability potential of new locations.

This decision stems from the varied situation across different regions. In Central, Eastern and South-Eastern Europe, weaker macroeconomic conditions are evident, including an economic slowdown and inflationary pressure in markets key to LPP, such as Romania. In Central Asia, by contrast, expansion is being driven by demographics and the macroeconomic environment. Logistical challenges and long delivery times remain a significant constraint here, which LPP aims to reduce through a new logistics center planned for 2027.

– The pace at which we are developing Sinsay far exceeds the industry growth rates seen in the region. At the same time, we are committed to ensuring that this development is aligned with market conditions and operational capabilities. In the current situation, what matters more than the number of new stores is that each new outlet has the right sales and profitability potential. That is why we are postponing some of the openings to later periods, so as to expand the network when the economic environment and operating conditions are more favourable. This decision allows us to better protect our margins and build a more secure growth profile for the Group – adds Marcin Bójko.

LPP is updating its financial targets for 2026, taking into account a more selective pace of network expansion and current operational assumptions. The sales forecast for core operations has been revised down to approx. PLN 26–27 billion, from the previous approx. PLN 28–29 billion, with positive growth expected in both the offline and online channels. At the same time, the company has raised its expected gross margin on sales to approx. 56.0%, the EBITDA margin to 23.5–24.5%, and the net profit margin to 9.5–10.5%, which ultimately means maintaining the targets for this year whilst achieving higher business profitability and financial stability for the Group.

Rational expansion will remain one of the pillars of LPP’s development in the longer term as well. Looking ahead to 2028 and beyond, the Group plans to further increase the scale of its operations whilst maintaining a focus on profitability, selective site selection and the closure of unprofitable stores. In 2028, Sinsay is set to open around 750 new stores, and from 2029 onwards, the brand’s expansion rate is expected to stabilise at around 300–350 openings per year. At the same time, the Group anticipates a 15–20% annual increase in e-commerce sales, supported by greater market penetration in the region, entry into new markets, omnichannel synergies and the gradual development of the marketplace.

Investments for further growth

Sustained high profitability allows LPP to continue its policy of sharing profits with shareholders whilst investing in the development of its sales network and logistics infrastructure.

For this reason, the Supervisory Board endorsed the Management Board’s recommendation to allocate PLN 1.7 billion from last year’s profit for distribution to shareholders and to pay a dividend of PLN 900 per share. This decision naturally aligns with the company’s approach to balancing further growth with building value for investors.

At the same time, the Group implemented its investment policy in the first quarter, allocating a total of PLN 562 million to further growth, of which PLN 252 million went towards the development of the sales network, mainly the Sinsay brand, and PLN 276 million towards logistics projects – the expansion of the center in Brześć Kujawski, robotisation and the construction of a warehouse in Tczew. The launch of the facility, planned for the first quarter of 2027, will be one of the key elements of the strategy to scale up online sales in foreign markets. Combined with the development of logistics infrastructure in Romania, these investments are intended to increase product availability, shorten delivery times and strengthen the Group’s potential for further growth in the omnichannel model.

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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 3,800 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.