This article first appeared on GuruFocus .
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Revenue:Group sales increased 5.1% (4.5% at constant exchange rates) to EUR18.3 billion.
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EBITDA:Increased 7.6% to EUR1.2 billion, with a margin of 6.8%, up 16 basis points year-over-year.
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Net Cash Position (ex-IFRS 16):EUR11 million as of June, after paying EUR409 million in dividends.
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Cash Flow (before dividends):Negative at EUR332 million.
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Capital Expenditure:EUR412 million in H1, focused on store expansion, remodeling, and logistics.
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Store Network:Opened 124 stores and remodeled 115 stores during the period.
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Group Like-for-Like Sales:1.4%.
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Biedronka Sales:Grew 1.7% to EUR12.6 billion (1.9% in local currency), with like-for-like up 0.2%.
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Hebe Sales:Rose 5% to EUR312 million (5.3% in local currency), with like-for-like up 2.4%.
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Pingo Doce Sales:Grew 5.3% to EUR2.7 billion, with like-for-like (ex-fuel) at 3.7%.
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Recheio Sales:Increased 2.5% to EUR673 million, with like-for-like at 1.3%.
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ARA Sales:Increased 30.2% in euros (21.1% in local currency) to EUR2 billion, with like-for-like at 6.8%.
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Banner EBITDA Margins:Every business (Biedronka, Hebe, Pingo Doce, Recheio, ARA) improved its EBITDA margin.
Release Date: July 30, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Group sales grew 5.1% to EUR18.3 billion, driven by strong volume growth across all banners.
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EBITDA increased 7.6% to EUR1.2 billion, with margin expanding 16 basis points to 6.8%.
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Every business improved its EBITDA margin, reflecting better mix, scale, and strict cost control.
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Biedronka achieved approximately 5% volume growth despite significant basket deflation, preserving market share.
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ARA in Colombia delivered strong sales growth of 30.2% in euros and 21.1% in local currency, with like-for-like accelerating to 7.5% in Q2.
Negative Points
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Geopolitical uncertainty and cautious consumer behavior kept pressure on food prices and promotions.
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Biedronka faced significant basket deflation, with Q2 like-for-like sales declining 1.6%.
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Higher financial costs resulted from the expansion program and capitalized leases.
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Cash flow before dividends was negative at EUR332 million, impacted by deflation and trade payables.
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No material improvement in market conditions is expected in the second half, with deflationary pressures persisting.
Q & A Highlights
Q: When do you think food inflation will turn in the Polish market? Can you give more detail on what is driving the Polish margin expansion? A: (Ana Luisa Virginia, CFO) We do not see an inflection point in the near term. The deflation is supplier-driven in key categories like meat and dairy, and the competitive environment remains intense. The margin improvement was driven by a better sales mix, improved store layouts, and operational efficiencies, including the DRS system now being in a "cruise mode." We are not providing a specific timeline for when inflation will return.
Q: Would you ordinarily be looking to reinvest some of the margin beat in H2? Can you give a sense of the breakdown of the volume growth (market share vs. mix vs. underlying consumer)? A: (Ana Luisa Virginia, CFO) We will protect price competitiveness. If we have to invest some margin to drive volumes, we will. The consumer environment remains cautious, with savings still increasing. The volume growth was a combination of market share gains (stable to slightly up in value, strong in volume) and the consumer's willingness to buy when prices are low. The competitive environment has not eased.
Q: You mentioned not all cost levers will apply in H2. What might fall away? Can you give an update on Slovakia? A: (Ana Luisa Virginia, CFO) The H2 comparables are different, and we will face more pressure from fuel-related costs and transportation. The deflationary pressure from suppliers is not easing. In Slovakia, we have 17 stores. The licensing process is slow, but we expect to open more. It is still EBITDA-dilutive, which is normal at this stage.
Q: Can you give a breakdown of sales growth in Poland (volume, deflation, Easter effect)? What drove the working capital deterioration? Is the gross margin expansion sustainable? A: (Ana Luisa Virginia, CFO) In Q2, Biedronka operated with ~6% basket deflation, volumes grew slightly more than 4%, and the calendar/Easter effect was slightly negative (~1%). The working capital deterioration was due to the deflationary environment and the timing of Easter payments. The gross margin expansion was driven by mix and supplier cost deflation. While some of this is sustainable, it will depend on competition and consumer demand. We will protect margins but may need to invest in price.
Q: Should we expect Biedronka's like-for-like to be negative in H2? What about the margin trajectory? EPS and free cash flow outlook? A: (Ana Luisa Virginia, CFO) We cannot assume negative like-for-like is the base case, but pressure will continue. On margins, we do not expect to drop EBITDA margins versus H2 last year, but the 25bps expansion in H1 may be harder to repeat. EPS will be challenged by higher interest from lease capitalization. Free cash flow should improve in H2, but the comparison with a very strong H2 2025 is tough.
Q: How much of the deflation was passing on lower supplier costs vs. incremental investment from Biedronka? Why does deflation lead retailers to go for volume? A: (Ana Luisa Virginia, CFO) A big part of the deflation is supplier-driven, which is neutral for gross margin percentage but pressures cash margin. This is why retailers chase volume to compensate. The volume growth also puts pressure on operational costs (transport, labor). Biedronka's layout changes and process improvements helped protect the cost base.
Q: What level of deflation are you planning for Q3? Has your relative price position strengthened? Would you be open to M&A in Slovakia? A: (Ana Luisa Virginia, CFO) We do not know the exact level of deflation, but we are not seeing an inflection point. We started Q3 with similar dynamics. Our price gaps were maintained, not significantly widened. On Slovakia, we do not comment on rumors, but we do not exclude M&A in countries where we operate.
Q: How much of the gross margin improvement came from better assortment mix? Which categories are driving this? Will procurement changes make you less exposed to margin pressure in the next inflation cycle? A: (Ana Luisa Virginia, CFO) Most of the gross margin improvement came from mix. We are seeing growth in more value-added categories (e.g., protein yogurts). We do not detail specific categories. On the next inflation cycle, we will be smart in crafting promotions to protect margin. We have a strong private label, but we need a win-win with suppliers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
