The Pepco Group released preliminary operating results for the third quarter of the 2026 fiscal year ending June 30.
El Dorado in Western Europe and boosted forecasts
Group revenues, excluding Dealz operations, rose by 8,5% year‑on‑year on a constant currency basis, reaching a peak of 1 089 000 million EUR.
The real fireworks, however, came from Western Europe. In Spain, Portugal, Italy, Germany and Greece, comparable sales (LFL) excluding fast‑moving consumer goods (FMCG) surged by an impressive 15% year‑on‑year.
In the Central‑Eastern Europe region the dynamics were modest but steady. Both the southern markets (Romania, Serbia, Bulgaria) and the northern ones (Poland, Czech Republic, Hungary) delivered LFL growth of 3,6%.
It is worth noting that in our region this figure was pulled back against an extremely high comparative base from the previous year. Over a two‑year period, cumulative LFL growth for the entire group was a solid 10,2%, which management regards as proof of lasting consumer revival.
These solid fundamentals allowed for a bold, yet fully justified, upward revision of the full‑year forecasts.
The company expects a historic gross margin of about 51% (vs. earlier 49,4%).
Base EBITDA growth is expected to reach double‑digit percentages, with expectations shifted from the lower to the middle part of this range, using the 2025 fiscal year base of 841 million EUR as a reference point.
Unlevered free cash flows are expected to hit around 300 million EUR, leaving behind earlier estimates of 250 million EUR.
See also: Will the 2026 market surprise? “Investors should ensure their portfolios are ready for a growth trend.”
Major clean‑up in the portfolio, i.e., Dealz sold for a pittance
The most spectacular move of the last quarter was the final sealing of the divorce from the FMCG segment. On 3 June 2026, Pepco Group signed a sale agreement for 100% of Dealz Poland shares to Modella Capital. Price? Symbolic 1 PLN.
This final closure of the transformation was initiated by the divestiture of the British Poundland in June 2025. Although the transaction amount sounds like a joke, it makes deep business sense, as all attention now focuses on Pepco’s most profitable brand, which already has 4 151 stores, after opening 74 net stores in the third quarter alone. The full‑year plan calls for 250 new openings.
Pepco does not leave Dealz entirely in the dust and protects its interests. The agreement provides 18‑month financing for inventory worth 20 million British pounds and an Exit Participation Agreement clause.
Through this, the group will receive 35% of net cash proceeds from every future Dealz sale – with no time limit. Now the results of this network will be classified as discontinued operations, cleaning up the main player’s balance sheet.
See also: CD Projekt shares before the breakthrough? GPW awaits a Witcher 3 DLC. The expert points to potential dates.
400 million euros on the table and a spoonful of skepticism from analysts
For investors, the key is a massive share‑repurchase program in the form of a tender offer worth up to 400 million EUR. The operation will launch and close before the end of September 2026.
Dariusz Dadej, analyst at Noble Securities, views these moves with moderate optimism. While the upward revision of forecasts and the spectacular return to shareholders signal strong board confidence, the expert highlights two significant risks.
First, financing the share buyback with debt will generate negative equity. Theoretically it will not directly hit cash generation, but it will heavily burden the balance sheet.
Second, the shadow of the main shareholder, Ibex Group, who controls almost 72% of shares and will participate in the tender proportionally, hangs over the price. Historical exits by Ibex suggest that their supply side could effectively block a price rally on the GPW in the medium term.
Investors view Pepco Group shares far more optimistically.
At market close on Thursday, 9 July, shares rose by 4,66% to 38,20 PLN.
Chart. Pepco Group share price
Source: TradingView.
See also: KGHM Polska Miedź shares plunge. Dividend announced. How much will shareholders receive?
Source: StockWatch.
