LPP: Expecting better trading momentum in 2Q26

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LPP: Expecting better trading momentum in 2Q26

sales prints underscore a pickup in activity in May and June,

with textiles recording 3.8% and 3.3% y/y increases, respectively, in real terms

(albeit a modest 0.3% and 0.1% in nominal terms). The medium-term outlook,

however, would be driven by changes in consumer purchasing power and

confidence, depending on the path for inflation acceleration in the CEE region,

which remains uncertain, in our opinion.

• LPP’s initiatives aimed at improving LFLs can bear fruit. LPP has

implemented a series of initiatives aimed at supporting sales: the company has

stepped up performance marketing spend, extended store opening hours, and

recalibrated product-team KPIs toward LFL sales growth rather than gross

profit margin. Looking ahead, for Sinsay’s Autumn-Winter collection, LPP

refreshed its womenswear offering with an emphasis on fashion content at

higher (albeit still affordable) price points, which the company expects to

positively impact the average selling price. Coupled with potential tailwinds

from easing competition with Asian cross-border platforms, this prompts us to

raise our 2Q26 revenue expectations by 1.8% and increase our 2026E revenue

by 0.4%, albeit we slightly lower profitability assumptions to account for

increased marketing costs.

• What would make us more positive on the stock. Our updated 2026 forecasts

land closer to the lower end-mid-range of the company’s FY26 guidance and

are 1% below Bloomberg median consensus for 2026 revenue and broadly in

line on EBITDA/Net Profit. Whilst the near-term expectations for the stock

currently look fair to us and the risk-reward is more balanced vs where we were

several months ago, we would need to have higher conviction on the consumer