Lenta shares immediately increased by 14% after the release of the report for the first quarter of 2024. Analysts note the company’s positive results, but do not expect “rapid growth” in quotes
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Quotes of Lenta (LENT) soared by 14.23% in trading on April 26, reaching RUB 1,140 per share at its peak. The retailer's shares were last traded at these levels in December 2021. By the end of trading, growth slowed to 12.22%, shares cost RUB 1,120 per share.
Lenta shares rose in price amid the publication of a report on the results of the first quarter of 2024. In the first three months of the year:
- company sales increased by 62.1% compared to the same period in 2023, to RUB 202 billion;
- Like-for-like sales (LFL) added 18.2% due to an increase in the average check by 10.6% and traffic by 6.9%;
- EBITDA amounted to ₽18 billion, an increase of 232%, EBITDA margin increased by 434 bp, to 6.4%;
- net profit reached ₽3.3 billion, against a loss of ₽2.8 billion for the same period in 2023.
- net debt to EBITDA (for trailing 12 months) decreased to 2.3x, compared to 2.8x as of December 31, 2023.
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According to Tinkoff Investments analysts, the company managed to achieve an EBITDA margin of 6.4% due to a significant increase in the average ticket and a reduction in operating costs.
Lenta CEO Vladimir Sorokin noted that the indicators reflect the company's transformation efforts. “We remain focused on strengthening the group’s multi-brand platform and in the reporting period we continued to integrate the Monetka and Lenta networks,” he said in Lenta’s press release.
In October 2023, the Lenta company acquired the Monetka chain of stores. “Monetka” at that time was one of the ten largest retail chains in Russia; at the time of acquisition, it managed 2,120 stores, mainly in the Urals and Western Siberia.
In addition, Vladimir Sorokin pointed to further development the company’s online channel – since the beginning of the year, cumulative sales of its own services “Lenta Online”, “Platypus” and Click & Collect, as well as online sales through partners, grew by 52.8% year-on-year, to RUB 16.7 billion. The company continues to expand the geographic coverage of the online channel – at the end of March 2024, more than 630 stores across Russia are connected to delivery.
Lenta shares rose on news of the purchase of the Monetka chain of stores. Lenta,Retail,Mergers and acquisitions
“It’s clear to the naked eye that Lenta’s business is developing. But at the same time, we believe that the retailer’s rapid growth is already included in the company’s quotes,” noted analysts on the MarketPower telegram channel.
However, not all analysts are optimistic about the prospect of further continued growth in the company’s shares. “Despite strong operating and financial performance, we maintain a neutral view on Lenta’s shares and consider them locally overbought compared to other retailers,” say Tinkoff Investments experts.
Lenta is one of leading Russian retailers and the largest chain of hypermarkets in Russia. The company is developing hypermarket and supermarket formats. In 2022, Lenta launched a new format of convenience stores under the Mini Lenta brand. The company also has online services Lenta Online and Utkonos.