The results announced by Apranga Group for the first half of 2025 reveal one of this year's main challenges – cost of goods sold management.

Revenue rose about 3% YoY in both Q2 and H1, with growth across most chains except the economy and footwear. In Estonia, turnover fell by 5.5% YoY in Q2 (similar to Q1), while combined revenues in Lithuania and Latvia increased 4.7% YoY.

Revenue by chain, 2025 Q2

Gross margin narrowed from 48.4% in Q2 2024 to 47.1% in Q2 2025, leaving gross profit largely in line with last year’s level. In the company’s main market – Lithuania – the gross margin contracted the most compared to 2024. Due to the lower margin, operating profit fell by 9% YoY in the second quarter and by 17% YoY in the half-year period. This happened despite well-controlled operating expenses, which grew at almost the same pace as revenue.

Gross profit

In the first half of 2025, free cash flow remained stable compared to the previous year, although funds from operations were 15% YoY lower. During this period, no additional cash flow was required for working capital, which had a positive impact on free cash flow compared to last year. The annual level of free cash flow continues to stand at €13.6M.

Free cash flow

Valuation metrics have climbed to the company’s historical average: P/E – 11.1x, EV/EBITDA – 5.6x, while metrics such as FCF yield (8.5%) and ROE (22.5%) continue to appear attractive.

Valuation metrics