LPP confirmed at HOLD, TP PLN 14,100 - Brick-and-mortar offensive to complement omnichannel
We confirm our HOLD recommendation while increasing the TP to PLN 14,100 from PLN 6,800 for Poland's apparel market leaderLPP has recovered impressively from the pandemic, being able to significantly boost its online sales and recoup most lost offline sales following the reopening of shopping centres in Poland on May 4, which has been generously rewarded by the share price performance
Shopping centre traffic still lags pre-pandemic levels and we view the brick-and-mortar outlook as rather fragile
Nevertheless, the company plans an acceleration of floor space development to +25% yoy in FY 21/22e with a focus on the value-for-money segment, underpenetrated locations (smaller towns, CIS) and to complement its omnichannel offering
We reckon with FY 21/22e online sales reaching PLN 2.9 bn, ahead of the PLN 2.8 bn company target
LPP SA Gdansk is clothing manufacturing group based in Poland. Co. is engaged in the design and distribution of clothing. Co.'s headquarters is located in Gdan'sk, including designing resources for all its brands. Co.'s stores offer its customer products that include jackets, shirts, sweaters, dresses, skirts, trousers, jeans, underwear and garment products. Co. also sells promotion clothing under a special selected brand. Co.'s product offering is addressed to a variety of customers for whom separate brands and chain stores are set up. Co. launches clothing under such brand names as: RESERVED, CROPP, MOHITO, HOUSE, and PROMOSTARS.
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