# Polish e-commerce leader Allegro trims forecast over inflation fears
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-09-29
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Allegro Trims Full-Year Guidance Due to High Inflation Impact
Meta Description: Poland's biggest e-commerce company, Allegro, trims its full-year guidance as high inflation threatens consumer spending. CEO focuses on cost efficiency
URL: https://financedigest.com/polish-e-commerce-leader-allegro-trims-forecast-over-inflation-fearshtml

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By Anna Pruchnicka

(Reuters) – Poland’s biggest e-commerce company Allegro trimmed its full-year guidance on Thursday for the second time this year, as it anticipates high inflation could lower demand.

The wider retail sector had warned of a decline in discretionary purchases as consumers save for essentials and inflation surges across Europe, reaching a 25-year-high in Poland.

Allegro also put its mid-term expectations under review pending analysis of the impact of the current performance and said there was a risk high [prices would reduce consumer](https://www.financedigest.com/investors-warn-big-consumer-firms-over-price-hikes-as-competitors-gain.html "Investors warn big consumer firms over price hikes as competitors gain") spending over the peak Christmas period.

With the prospect of a significantly more [challenging environment driven by high inflation](https://www.financedigest.com/how-finance-leaders-can-turn-the-inflation-challenge-into-opportunity.html "How finance leaders can turn the inflation challenge into opportunity") and the rising costs of living, we are putting increasingly more focus on cost efficiency on our side,” Roy Perticucci, who took over from Francois Nuyts as Allegro’s CEO, said in a statement.

[Allegro expects year-on-year revenue growth for its core Polish](https://www.financedigest.com/polish-e-commerce-firm-allegro-eyes-higher-q1-profit.html "Polish e-commerce firm Allegro eyes higher Q1 profit") market of 23%-26% compared to 25%-30% previously, and that adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) will rise by 10%-12% versus a previous range of 10%-15%.

Including Mall group, which it acquired in April, Allegro [sees adjusted EBITDA rising](https://www.financedigest.com/ecb-governors-see-rising-risk-of-rate-hitting-2-to-curb-inflation-sources.html "ECB governors see rising risk of rate hitting 2% to curb inflation – sources") 2%-6% compared to its earlier guidance of 4%-11%.

Polish inflation was 16.1% in August, statistics [office data showed and some economists say the combination of high prices and economic slowdown could tip](https://www.financedigest.com/tips-for-moving-office-how-to-use-packing-boxes-efficiently.html "Tips for Moving Office: How to Use Packing Boxes Efficiently") the country into recession.

Allegro’s second-quarter revenue and adjusted EBITDA was in line with preliminary results announced [last month](https://www.financedigest.com/fintech-trends-to-look-out-for-during-the-last-six-months-of-2019.html "Fintech trends to look out for during the last six months of 2019") at 2.21 billion zlotys ($445.03 million) and 484.1 million zlotys, respectively.

Allegro said weaker than expected [consumer demand](https://www.financedigest.com/lights-maker-signify-cuts-annual-outlook-on-lower-consumer-demand-china-woes.html "Lights maker Signify cuts annual outlook on lower consumer demand, China woes") reduced gross merchandise value (GMV) and margins at Mall Group.

It said it was working to stabilize margins at Mall’s loss-making first-party business, while [preparing its third-party marketplace for commercial roll-out](https://www.financedigest.com/unicredit-prepares-for-multinational-roll-out-of-instant-payments.html "UniCredit prepares for multinational roll-out of instant payments") in the Czech Republic.

Allegro [expects Mall’s adjusted EBITDA loss](https://www.financedigest.com/dollar-set-for-weekly-loss-amid-expectations-fed-will-slow-hikes.html "Dollar set for weekly loss amid expectations Fed will slow hikes") to be 120-160 million zlotys this year.

($1 = 4.9660 zlotys)

(Reporting by Anna Pruchnicka; editing by Barbara Lewis)


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