Poland’s biggest fashion retailer LPP on Thursday reported third-quarter profit that missed analysts’ forecasts as rising labour costs in the region hurt margins.

Net profit in the third quarter came in at PLN579 million ($142.38 million) against analyst forecasts of PLN632 million. Selling, general, and administrative expenses (SG&A) per square meter rose 10.6% to PLN317 million versus PLN287 million a year earlier.

LPP said in its earnings presentation the rise is mainly due to higher salary costs in traditional stores and new store openings.