By Marta Maciag
(Reuters) -Poland’s biggest fashion retailer LPP on Thursday reported third-quarter profit that missed analysts’ forecasts as rising labour costs in the region hurt margins.
Net profit in the third quarter came in at 579 million zlotys ($142.4 million) against analyst forecasts of 632 million zlotys.
Selling, general and administrative expenses (SG&A) per square meter rose 10.6% to 317 million zlotys versus 287 million zlotys a year earlier.
LPP said in its earnings presentation the rise is mainly due to higher salary costs in traditional stores and new store openings.
The Gdansk-based retailer, whose stores are located mostly in Central Europe, said store costs are under control, but blamed a significant rise in minimum wages and higher remuneration reviews of its employees.
It opened 368 stores year on year, 323 of which are Sinsay stores, its budget brand which competes with fast fashion retailers like Inditex’s Zara.
It plans to open 275 Sinsay stores in the fourth quarter alone.
In 2025, LPP said it targets about 26 billion zlotys of revenues, with capital expenditures reaching 3.5 billion zlotys.
Spanish peer Inditex reported weaker-than-expected results on Wednesday, as sales slowed down more than estimated.
($1 = 4.0666 zlotys)
(Reporting by Marta Maciag. Editing by Jane Merriman, Alexandra Hudson and Toby Chopra)
