X5 Company News - Sales grew by 13.2% yoy, strong EBITDA margin is expected
Yesterday, X5 reported a neutral 2Q 20 trading update featuring net retail sales growth of 13.2% yoy, which was slightly lower than our expectations. On a positive note, the company sees the sales of its stores improving after Covid-19 related measures were eased in the middle of June, with positive momentum continuing in July, particularly at proximity stores, which are enjoying double-digit LFL revenue growth. The company expects the 2Q 20e EBITDA margin to be above the level of 2Q 19 (8.3%), which was an abnormally strong quarter in terms of profitability. However, we think that it would be wrong to extrapolate either the likely strong profitability of 2Q 20e or strong sales growth in July as things are likely normalising in terms of both customer behaviour and HoReCa operations.X5 Retail Group is a holding company. The main activity of Co. is the development and operation of grocery retail stores. Co. operates a retail chain of soft-discount, supermarket and hypermarket stores under the brand names "Pyaterochka", "Perekrestok" and "Karusel" in major population centres in Russia, including but not limited to Moscow, St. Petersburg, Nizhniy Novgorod, Rostov-on-Don, Kazan, Samara, Lipetsk, Chelyabinsk, Perm, Ekaterinburg and Kiev, Ukraine.
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