Jeronimo Martins saw its stock climb about 5% after reporting second quarter fiscal 2026 results, a move driven by stronger-than-expected profitability at Biedronka, the group's Polish supermarket chain and the country’s largest food retailer.
On the top line, Biedronka recorded a like-for-like sales decline of 1.6% year-on-year, missing the consensus expectation for a 0.4% decline. The company attributed the shortfall to basket deflation, which reduced revenue per transaction even as store activity continued.
Profitability, however, painted a different picture. Biedronka’s EBITDA came in 2.6% above consensus estimates, and margins widened by 40 basis points year-on-year. That margin expansion materially offset the weaker sales performance and was the principal driver behind the positive market reaction to the results.
At the group level, reported EBIT and profit before tax were broadly in line with market expectations. Management noted that higher depreciation and amortization charges, along with other items, contributed to the group-level results aligning with consensus.
Company commentary accompanying the results stressed that the operating environment was more challenging than anticipated when the first quarter results were released. Management specifically said that deflation is expected to persist for longer than previously forecast, a factor that has weighed on like-for-like sales growth.
Looking ahead, the company cautioned that the pattern of margin improvement seen in the first half of the year may not recur to the same extent in the second half. That guidance signals a degree of caution on sustainable margin momentum despite the quarter’s outperformance.
Investors responded to the pronounced margin beat at Biedronka by bidding up the parent stock, reflecting the market emphasis on immediate profit resilience even amid top-line pressures. The results underline a mixed performance dynamic for the group: sales under pressure from deflation, offset by operating leverage and margin gains that supported consensus-beating EBITDA.
Context and implications
For market participants focused on consumer staples and listed retailers, this report highlights how profitability metrics can outweigh sales weakness in shaping short-term share moves. The company’s caution about persistent deflation and potentially weaker second-half margin performance will be relevant for investors assessing earnings durability and sector outlooks.