Poland’s largest apparel retailer LPP confirmed its full-year revenue target of 20-21 billion zlotys ($5.2-5.5 billion) on Wednesday after posting a flat second-quarter net profit, as rising costs of stores and distribution offset higher sales.

Second-quarter net profit edged up a little over 1% to 444 million zlotys from a year earlier, with sales up 9% to 5.01 billion zlotys.

The modest uptick was offset by a 27% jump in the costs of stores, distribution, and overheads to more than 2 billion zlotys, with the company citing the development of its store network, logistics spending and personnel costs.

The group expects third-quarter sales to rise 32% year on year on a constant currency basis. It also plans to open 140 new stores in the three-month period.

LPP, the biggest retailer in Poland, is rapidly expanding into European markets, especially in the Central-Eastern and Southern Europe regions, which accounted for a third of total revenue in the second quarter.

The expansion comes after the company sold its Russian business in June 2022, after Russia invaded Ukraine.