(Reuters) -Poland’s largest e-commerce company Allegro on Thursday reported a beat on its domestic third-quarter earnings, but trimmed annual volume growth forecast citing a slower start to the typically high-traffic Black Weeks.
Allegro’s adjusted core earnings (EBITDA) were 1.04 billion zlotys ($283.5 million) in its home market in the third quarter, compared with an average estimate of 978 million in a company-compiled poll.
It now expects its gross merchandise value, a key industry metric used to measure transaction volumes, to rise between 9% and 9.5% in Poland this year, versus an earlier guidance for around 10% growth.
That brought the group GMV guidance down to 8-9% growth, compared to the previously guided 9-10%.
Allegro said it had seen a slow start to the Black Weeks promotional period and delayed winter season demand, with like-for-like growth in the first half of November slowing to a low single-digit percentage from above 10% growth in October.
It confirmed, however, its annual revenue and profitability targets that it had revised higher in September.
JPMorgan analysts said in a note that they saw the downgrade as an “incremental negative” which could weigh on Allegro’s shares on Thursday.
MANAGING DELIVERY COST
GMV in Poland rose 10.4% in the third quarter. Steps to reduce delivery costs, Allegro’s biggest cost line, also supported profitability, it said.
The share of delivery volumes managed within Allegro’s partnership service rose to 36% in the quarter, from 34% in the previous one, and the company said it was on track to roll out more than 8,000 of its own parcel lockers this year.
Quarterly core earnings were also helped by a 31.8% jump in advertising revenue, along with sales of consumer loans, it added.
AI SHOPPING ASSISTANT
Allegro said it had launched tests of its AI shopping assistant on its mobile app that would support search on its platform and provide “contextual advice and inspiration” for customers.
The group had said in September it expected to deploy artificial intelligence to around 40% of its new development projects.
($1 = 3.6690 zlotys)
(Reporting by Anna Pruchnicka in Gdansk, editing by Milla Nissi-Prussak)
