Jerónimo Martins: positive Q2 results

Date : 01 August 2019

Jerónimo Martins’ group net sales increased 10.3%, with like-for-like (LFL) sales up 7.8% in Q2, enhanced by the Easter calendar effect. Consolidated sales in first half of 2019 increased 5.7% to €8.9 bn, 3.9% contributed by its LFL performance.

Positive sales performance

Positive Q2 results were seen across the company, influenced by the calendar change relating to Easter and intense promotional campaigns. Group net profit in H1 2019 increased 0.7% to €181m, despite eight fewer business days in Poland. Net profit in Q2 2019 grew 14.2% compared to Q2 2018.

Division performance

Performance across the company contributed to positive sales growth. Jerónimo Martins is spilt into different banners; Pingo Doce, Biedronka, Hebe, Ara, Recheio.

Portugal-based Pingo Doce’s sales grew 5.6% to €1 bn in Q2 2019, with an LFL performance of 5.1%. The positive calendar shift related to Easter contributed to the results. Furthermore, the banner had four store openings in the first six months of the year, helping it increase in sales.  

Recheio sales increased by 2.1% to €253m, LFL increase of 3.2%, ahead of Q2 2018 results. Recheio is benefiting from the dynamic retail sector and improvements in the economy; food inflation is low at 0.5% (+0.1% in Q2).

Poland-based Biedronka’s sales grew 12.1% (11.5% in euros), LFL performance was 8.6%. During the quarter Biedronka applied commercial campaigns with favourable sales mix in June. In addition, the seasonal effects contributed a boost in the LFL in Q2. Biedronka opened 27 new stores and closed 11, over the six-month period, supporting its positive sales.  

Colombia-based Ara’s Q2 sales increased 34.9% (25.3% in euros) to €187m. Ara prioritised improving sales growth in its current network, in the first six-months 25 new locations were added. The end of Q2 2019 saw it operate 557 stores.

Hebe sales grew by 29.4% (28.9% in euros) to €61m, with an LFL performance at 10.3%. Sales increased despite eight fewer business days, because of the ban on Sunday trading. 

Future focus

Future targets set by Jerónimo Martin’s president and CEO are to continue to outperform the markets the company operates in. Achieving this goal by reinforcing operations and working to have the best commercial proposals to earn more consumer recognition and preferences.

Jerónimo Martin could be affected by Poland’s decision to introduce a new sales tax. The sales tax would enforce payments depending on the size of a retailer’s revenue, imposing higher rates on bigger chains. The implications of Poland introducing a sales tax could affect Biedronka, by adapting to the extra costs and pressure of price increases.