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Fix Price Group PLC (LON:FIXP), a Cyprus-based holding company, reports its operating and financial results for the second quarter of 2024. For this period, the Group achieved a revenue increase of 9.9% year-over-year, reaching RUB 76.7 billion. Retail revenue grew by 11.8% to RUB 69.3 billion, while wholesale revenue was RUB 7.4 billion. Like-for-like (LFL) sales rose by 3.2% year-over-year, reflecting improvements in consumer confidence and increased impulse buying.
Store Expansion and Loyalty Program Growth
During Q2 2024, Fix Price added 177 new stores, including 15 franchise locations, bringing the total number of operational stores to 6,722 as of 30 June 2024. The total selling space expanded by 37,800 square meters, reaching 1,456,920 square meters, an 11.4% increase year-over-year. The loyalty program saw a 13.0% increase in registered cardholders, reaching 27.1 million. Transactions with loyalty cards contributed 59.9% of retail sales, with the average ticket value for loyalty card purchases being significantly higher compared to non-loyalty purchases.
Gross Profit and Margin Performance
Gross profit for Q2 2024 increased by 12.4% to RUB 26.0 billion, with the gross margin improving by 74 basis points to 34.0%. This improvement is attributed to better assortment management and enhanced commercial terms with suppliers, which helped mitigate the effects of volatile currency exchange rates.
SG&A Costs and EBITDA Metrics
Selling, general, and administrative (SG&A) costs, excluding long-term incentive plan (LTIP) expenses and depreciation and amortization (D&A), amounted to 17.3% of revenue, compared to 15.3% in Q2 2023. This increase is primarily due to higher staff, advertising, repair, and maintenance costs. Adjusted EBITDA under IFRS 16 grew by 2.3% year-over-year to RUB 13.0 billion, with an EBITDA margin of 16.9%. EBITDA also increased by 3.0% to RUB 12.8 billion, achieving an EBITDA margin of 16.7%. Net profit for the quarter was RUB 5.8 billion, reflecting a net profit margin of 7.6%. Capital expenditures (CAPEX) as a percentage of revenue decreased to 1.7% from 1.9% in Q2 2023.
H1 2024 Financial Overview
For the first half of 2024, Fix Price reported a revenue increase of 9.4% year-over-year to RUB 148.4 billion. Retail revenue grew by 10.5% to RUB 132.7 billion, while wholesale revenue rose by 0.9% to RUB 15.7 billion. Like-for-like sales increased by 1.9%. The Group opened 308 new stores, including 287 company-operated and 21 franchise stores. The total selling space expanded by 66,309 square meters to 1,456,920 square meters. The loyalty program grew by 1.4 million cardholders, reaching 27.1 million. Retail sales through loyalty cards accounted for 60.4% of the total.
Gross Profit and Margin for H1 2024
The gross profit for H1 2024 rose by 9.6% to RUB 49.5 billion, with a marginal increase in the gross margin to 33.3%. SG&A costs, excluding LTIP and D&A, reached 18.1% of revenue, up from 15.7% in H1 2023. This increase was driven by higher staff and operational costs but was partially offset by improved cost management in certain areas. Adjusted EBITDA under IFRS 16 was RUB 22.9 billion, with a margin of 15.5%. EBITDA under IFRS 16 was RUB 22.5 billion, resulting in a margin of 15.2%. Net profit for H1 2024 stood at RUB 9.1 billion, with a net profit margin of 6.1%. Capital expenditures as a percentage of revenue decreased to 1.8% from 2.5% in H1 2023.
Operational Insights and Market Conditions
The Group observed a recovery in consumer demand during Q2 2024, with a 3.2% increase in LFL sales. Despite ongoing economic uncertainties and inflation, consumer behavior has led to more frequent impulse purchases. The Group’s focus on seasonal assortment and improvements in product offerings has driven sales growth. The operating environment remains challenging in the Russian market due to labor shortages and logistical issues, though the Group's logistics management has ensured timely product delivery.
