Lenta revenue growth quickens to 38% in Q2
MOSCOW. July 15 (Interfax) - Lenta boosted sales revenue 39% year-on-year in Q2 2014 to 46.3 billion rubles, the Russian retailer said in a statement.
Revenue grew 37.2% in Q1 2014.
It rose 38.3% in H1 2014 to 85.9 billion rubles.
There was like-for-like (LFL) sales growth of 14.1% against Q2 2013.
There was LFL traffic growth of 6.1% combined with a 7.6% increase in LFL average ticket.
In Q2 the company opened three hypermarkets and four supermarkets. Total selling space increased to 543,800 sq.m. as of June 30, 2014, which is 37.2% more year-on-year.
"Lenta continued to successfully implement its strategy for growth during the second quarter of 2014. Total sales growth accelerated to 39%, through a combination of 14% like-for-like growth and a 37% year-on-year increase in selling space. More and more customers are recognizing the improvements we are making to our offer - in product assortment, pricing, promotions and the targeted use of our unique loyalty programme - and this was reflected in both like-for-like traffic growth of over 6% and a 37% increase in active loyalty card holders," Lenta's CEO Jan Dunning was cited as saying in the statement.
"Importantly, in addition to maintaining our strong trading momentum, we have continued to build Lenta's development pipeline, including investments in our distribution and supply chain, to underpin our long-term growth ambitions. We are confident of delivering this year's programme of 24 new hypermarkets and 15 new supermarkets, adding more than 30% to our total selling space. Next year's store opening programme is also progressing well and we reconfirm our long-term target of doubling net selling space over the three years to December 2016," he said.
In H1 Lenta increased LFL sales by 13.8%. It also observed LFL traffic growth of 6.1% combined with a 7.3% increase in LFL average ticket. During January to June the company opened five hypermarkets.
"Given first half openings and progress in the construction of new stores, Lenta confirms its initial guidance of 24 hypermarket and 15 supermarket openings in 2014. The Company expects these store openings to translate into an increase of at least 30% in total net selling space for 2014. We have also made good progress in building our new site pipeline and maintain our long-term target to double net selling space over the three years to December 2016. Based on second quarter results and successful execution of our store opening programme, we expect sales growth in the range 34-38% for the full year 2014," the statement said.
This is the first time Lenta has given a sales growth forecast for the year.
"We have also made good progress in building our new site pipeline and maintain our long-term target to double net selling space over the three years to December 2016," the statement said.
"Five hypermarkets and four supermarkets opened during the first half of 2014," the statement said.
"Over the last 12 months, Lenta has invested heavily in expanding its store base, opening 22 hypermarkets and 13 supermarkets, including 14 hypermarkets in the fourth quarter of 2013. The proportion of younger stores, which typically have lower sales and higher costs as a percentage of sales than mature stores, has therefore increased significantly," the statement said.
"As a result of this expansion, total SG&A expenses rose significantly faster than sales in the first half of 2014. SG&A expenses as a percentage of sales in LFL stores remained stable, reflecting our continued focus on productivity. We have also continued to work on improving our price positioning and the strength of our promotional offers, as we did last year, and continue to benefit from improvements in supplier conditions, supporting our growth," it said.
"We expect the balance of these dynamics to result in a different shape to the evolution of this year's EDITDA margin for Lenta. Specifically, for the first half it will mean an adjusted EBITDA margin as a percentage of sales for the first half of 2014 around 1.2 percentage points below the level of the same period of last year. During the second half we anticipate that Lenta's EBITDA margin will both reap the benefits of the step up in investment in growth as well as be supported by the annualisation of last year's second half margin reduction," it said.
"We believe that the combination of these elements will contribute positively to our EBITDA margin for the second half of 2014. Lenta will report first half 2014 financial results in detail on September 4, 2014," the statement said.