Shares in Polish fashion group LPP recoup some losses
(Reuters) – Shares in Polish fashion group LPP rose around 8% on Monday, recovering some of last week’s losses made after a Hindenburg Research report questioned the 2022 sale of its Russian assets.
LPP on Friday denied the allegations in the report.
The stock was up 8.2% by 0836 GMT, after falling 36% on Friday, the most on record.
The company reported a preliminary 15.7% rise in fourth-quarter sales to 4.84 billion zlotys ($1.2 billion), while net profit from continuing operations jumped 163.5% year-on-year to 484.4 million zlotys.
Krzysztof Kawa, an analyst from Erste Group, said the results were in line with expectations.
It is set to report full results on March 27.
JPMorgan said in a note it expected volatility in the shares to persist, noting that 20% of LPP’s shares were pledged with banks, which could trigger potential margin calls.
“We believe that further clarification from the company on the Russia exposure is needed to restore investor conviction in the stock,” JPMorgan wrote.
JPMorgan added that aside from damage to its reputation, LPP could face risks from negative consumer response leading to softer sales, as well as negative response from its creditors.
LPP will hold a press conference at 10 a.m. local time (0900 GMT).
($1 = 3.9498 zlotys)
(Reporting by Anna Pruchnicka; Editing by Kirsten Donovan and Emelia Sithole-Matarise)
