X5 Retail Group NV, Russia’s second-largest retailer, has started closing the gap on market leader Magnit PJSC after about six years of losing ground.
Sales at X5 rose 28 percent in the second quarter, the Moscow-based company said in a statement Monday, outpacing the 27 percent growth reported last week by Magnit.
X5, controlled by an investor group including billionaire Mikhail Fridman, has struggled to keep pace with its larger competitor since 2009 as Magnit has more than tripled its store count. To catch up, X5 installed a new management team led by Chief Executive Officer Stephan DuCharme and has started refurbishing stores and improving the product assortment.
“The results look exceptionally good,” Marat Ibragimov, analyst at BCS Financial Group, said in a note. “We see the numbers as supportive to our bullish view.”
X5 rose 3 percent to $18.90 at 10 a.m. in London, where the stock trades. The shares trade at about 11 times historic earnings versus 22.7 times for Magnit.