Jeronimo Martins SGPS SA

ELI:JMT

Q1-2025 Earnings Call

[Operator]

Good day, and welcome to the Jerónimo Martins First Quarter 2025 Results Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Ms. Ana Luisa Virginia, Chief Financial Officer of Jerónimo Martins Group. Please go ahead, madam.

[Ana Virgínia, executive]

Thank you, Nadia. Good morning, ladies and gentlemen, and thank you for joining this call dedicated to our first quarter results.

In our corporate website, you can find the results release, a slide presentation and a fact sheet for the period. Our recently approved 2024 Annual Report is also available there, including our sustainability commitments for the 2024-2026 period.

And surprisingly, 2025 started with a volatile and extremely uncertain landscape further limiting visibility on consumers' behavior trends. Overall, the rise in minimum wages increased household disposable income in the countries where we operate. Notwithstanding families remain cautious in their food spending and highly promotions-driven.

In light of this refrained context, we maintained our key strategic priority to ensure price competitiveness to earn the preference of consumers and continue to strengthen our market positions.

Although basket inflation turned positive at our main food banners, the challenge well known to us at this point of operating with low top line inflation and high cost inflation persisted.

Therefore, together with unwavering focus on sales, our teams maintained a tight control over all profitability drivers to mitigate the impact of margin pressure. With price competitiveness ensured, sales grew 3.8% or 1.9% at constant exchange rates. Following sales and even stricter cost management, EBITDA increased 3.8% or 1.2% at constant exchange rates with the respective margin standing in line with prior year at 6.3%.

This performance was achieved in a quarter marked by a negative calendar effect that for our main businesses range from 3 to 4 percentage points of sales growth.

At the end of March, the group registered a positive cash position of EUR 332 million.

Looking now at the quarter P&L, I would like to draw your attention to a couple of highlights of the performance. First, sales grew despite the already mentioned strong calendar effect with a solid contribution from expansion. Second, gross margin increased, reflecting both the work undertaken by Ara throughout 2024 to improve margin, which will benefit 2025 figures, particularly in the first months of the year and the easier comparable at Biedronka as a result of the banner's sharp response to a demanding and fast-changing context in Q1 '24 with drastic weakening in consumer demand and more intense competition.

Against last year's backdrop, our main banners stepped up investment in successful campaigns that drove outstanding volume growth, but visibly impacted the margin mix when now compared with Q1 '25. All in all, at the group level, sales resilience and gross margin performance offset cost pressure driven by wage increases. As a result, consolidated EBITDA grew in line with sales and margin remained stable at 6.3%.

Cash flow for the period was an outflow of EUR 398 million. This reflects the normal business seasonality after Christmas and also the fact that Easter this year was in April, and as such, did not benefit working capital as of 31st March.

The group ended the quarter with a strong balance sheet and a positive cash position of EUR 332 million when excluding IFRS 16.

The General Shareholders' Meeting, held on 24 April, approved the proposal to distribute a dividend of EUR 0.59 per share, a gross amount, totaling EUR 370.8 million, which will be paid on 15 May.

The shareholders also approved allocating EUR 40 million from the 2024 results to the Jerónimo Martins Foundation. According to our statutory auditor, and in agreement with IAS 1, this amount will appear in the income statement for Q2 '25 booked as a cost in an autonomous heading.

I will now guide you through the detail of the performance, starting with sales, which grew by 3.8%, 1.9% at constant exchange rates to reach EUR 8.4 billion. Our main banners are operating with very low basket inflation, albeit not negative. Group like-for-like was at minus 2.2%, impacted by calendar effects and tough comparables at all banners, particularly at Biedronka.

In this year, when we are celebrating the 30th anniversary of Biedronka in Poland, we are proud to acknowledge that it has been an amazing journey with regard to the evolution of its value proposition, while throughout the years, price leadership has been a constant delivery of our main banner's promise to Polish families.

In the first quarter, Biedronka maintained a nonstop commercial dynamic to fuel its intense promotional activity and kept its well-recognized price competitiveness. As a result, sales grew by 3.4% to EUR 5.9 billion or 0.3% in local currency with a 0.3 percentage points of market share gain in the period. Like-for-like was at minus 3.5%, impacted by the previously mentioned calendar effects and a very difficult comparable of Q1 '24.

Expansion continued to contribute solidly to top line growth. The banner opened 56 stores over the 3 months and remodeled 27 locations. In March 2025, Biedronka also opened its first 4 stores in Slovakia and a distribution center being now focused on evaluating the consumers' reaction to its value proposition in that country.

Facing fiercer competition in the Polish health and beauty markets, HeBe operated with significant deflation to protect its top line. Sales grew 11.9% or 8.5% in local currency to reach EUR 145 million with the online channel, representing 21% of total turnover. Over the period, 4 HeBe stores were opened in Poland and 1 in Czech Republic.

Pingo Doce's intense promotional activity, together with the contribution of the All About Food stores, delivered 2.8% sales growth to reach EUR 1.2 billion in the period. Like-for-like, excluding fuel, was at 1.1% despite the negative calendar effects.

The banner opened 1 store and continued remodeling the network with 13 locations more now converted to the All About Food concept.

In a tougher context, particularly felt by the HoReCa channel, Recheio kept investing to protect sales. With Easter occurring outside the quarter and a heavy rainy season impacting one of its main categories, in this case beverages, sales declined slightly by 0.4% to EUR 302 million, with like-for-like standing at minus 0.5%.

Ara executed its commercial strategy marked by strong promotions to offer the best saving opportunities to the Colombian families. Sales grew 9.1% or 13% in local currency to reach EUR 775 million and like-for-like was at 3%.

Expansion remained as a solid contributor to top line growth. In the first quarter, Ara opened 9 stores and 1 distribution center. Our Colombian banner remains on track to deliver its expansion target for the year that also includes the integration throughout Q2 of around 70 locations previously operated by Colsubsidio.

Consolidated EBITDA grew 3.8% or 1.2% at constant exchange rates to reach EUR 528 million. Overall, all businesses posted a very solid underlying performance being able to offset the pressure on the respective EBITDA margin deriving mainly from higher labor costs.

Group EBITDA margin was flat at 6.3%. At Biedronka, EBITDA margin was kept stable despite the rise in labor costs and the negative like-for-like. In addition to the even tighter cost control, I flag here the already mentioned effects of easier comps on the gross margin that in the quarter favored this stability.

At HeBe, price investments and a low like-for-like impacted by strong deflation significantly pressured EBITDA margin. In Portugal, a reference to the slight margin pressure mainly due to higher labor costs.

And finally, Ara continued to protect the improved mix dynamic created in 2024 and to strengthen cost control measures. I flag here that from an EBITDA margin perspective, Ara faces an easier comp in the first half of the year.

We know that the first quarter only allows for a very limited understanding of the market trends, and this is particularly true having in mind the high level of uncertainty around geopolitics and socioeconomic dynamics. This said and looking at the performance beyond the calendar impact, sales delivery was solid against the comparable that was extremely challenging to overcome. The work done by the companies to protect profitability paid off and was also supported by the easier comparable for gross margin.

Looking ahead, we continue to see an extremely volatile landscape and somehow sluggish and unpredictable consumer context as well as sustained and high cost pressure. As we said on March 19 when presenting the outlook for 2025, which we fully reiterate today, we will remain focused on protecting price competitiveness to grow sales and we also need to protect profitability by managing margin pressure deriving from higher personnel costs and more intense competition. While we know how difficult it is to reach that balance, we are totally committed to delivering on this target.

Thank you for your attention. Operator, I will now -- I am now ready to take questions.

[Operator]

[Operator Instructions] And now we're going to take our first question and it comes from the line of João Pinto from JB Capital.

[João Pinto, analyst]

I have three, if I may. Regarding Biedronka's margin, first, can we assume that Biedronka's gross margin increased in line with the 30 basis points increase at the consolidated level?

My second question also on Biedronka. Regarding OpEx inflation, if we adjust for the expansion, it seems that OpEx was slightly down year-on-year. Can you give us some color on OpEx drivers? Is there any strong tailwind or any one-off effect this quarter that is offsetting the pressures from staff costs?

And my third and final question is on Slovakia. Can you quantify the costs that were booked at EBITDA in the first quarter?

[Ana Virgínia, executive]

So in what concerns Biedronka's gross margin, of course, we do not disclose it. But I can tell you that it's really increased versus last year. As we said, there is an easier comparable because last year, I think that we were not surprised, but in fact, having to operate with a quite significant deflation in Q1 2024 was really challenging for the company. Now that we turn back, of course, with a very low basket inflation, but nevertheless, it's completely different to operate with a slight inflation and not in deflation and the mix really helped on that.

So I will not disclose the increase that we had in the gross margin. But in fact, we improved the gross margin at Biedronka, but without, and I really reinforce this, without compromising the competitiveness in the market. So this is really had to do with the dynamics and the mix and comparable with last year.

On OpEx drivers, I would say that the first one was, of course, what the company really did to contain costs. We knew that the first quarter would be very challenging considering all the calendar effects. And I remind here that it was not just the absence of Easter, we had 1 more day of sales and 1 more day of sales in 90 is more than 1% impact due to the leap year. And we also had 1 more Sunday ban in this quarter versus the first quarter in 2024. And this, of course, is quite important and justifies the performance.

Of course, the company did all its best. It's true that not having a peak in sales also helped with some temporary costs at labor, so we do not need to hire so many temporary employees to manage the peaks as we will do for Easter, of course. It's true that we also benefited from more savings in terms of fuel costs in Poland. And overall, I think that, as I said, in all headings, the company tried to save as much as possible to compensate.

So in terms of consumption, to compensate for the increase in price. This goes from packaging to everything that has to do with the rest of the costs at the operational, but not just at store and logistics but also at the head office cost.

For as -- if this will be sustainable or not, I think that part probably not. It will not depend just on us as the fuel, for instance. But what I can say is that, of course, the company will continue to do its best to manage also and have a tight cost control to compensate some of the pressure and compensate what has been already a rise in salaries and in labor costs that was quite significant, in line with -- at least for our store and logistic centers in line with the national minimum wage increase, not to lose also competitiveness on the labor market, considers the tightness of labor in Poland, as you know.

For Slovakia, I really apologize, but we will be very, very limited in what we will disclose on Slovakia because I think really that is not in the best interest of our investors to provide a lot of information to our competition, in fact, to be very blunt. I think that we will, of course, reopen 4 stores. It's true that it will be dilutive. I think I flagged that in our last conference call. We have a DC currently for 4 stores, and of course, a head office, all very controlled and very tight. But of course, with no top line to compensate for all those costs.

So I will not disclose that, but I can tell you, João, that is not -- if you look at the other costs that we have at the EBITDA level, in fact, they didn't progress massively, although they have the corporate costs, Slovakia and also the agribusiness, but the progression was not that massive. So I think that we are being -- managing also very tightly those costs.

[Operator]

Now, we are going to take our next question, and the question comes from line of William Woods from Bernstein.

[William Woods, analyst]

The first one is could you just elaborate a little bit more on the margin mix benefit that you got in Biedronka in this quarter?

And then I suppose when you look at it, obviously, you held margins pretty flat year-over-year. But obviously, last year, Q2 and Q3 and Biedronka had a lot more pressure. Do you think we could see margin improvement in Q2 and Q3? And if not, why not?

And then the last question is just on the Polish competition and the Polish competitive environment. Do you think that the number of promotions have come down quite significantly over the last few weeks, but the passing on inflation is still quite difficult in the market? Or are you not seeing any change to the competitive environment there?

[Ana Virgínia, executive]

Thank you, William. So on the margin mix, of course, I will not elaborate much, but I can tell you that if we compare with last year, as I said, we have to invest significantly. It was really a big correction and a big competition in the market because it was really -- everything happened quite fast at a certain point with the increase in costs came also much more competitiveness in the market and much more competition with everybody fighting for sales, particularly, of course, more on the discount side.

But everybody because there was no help from inflation on the contrary. So it was really, I would say, a very tough first half of the year last year. But we have to take into consideration that last year Easter was on Q1. So when we are talking about Q2 and also high pressure, you also have the calendar effect.

So it's very difficult, I would say, that we should wait probably for the end of the first half at least to have a more -- a more comparable base to take any conclusion. But this being said, so the environment continues to be quite competitive, no doubt, and Biedronka continues to invest in prices, particularly in some of the categories that are much more under pressure. And where basically you do -- or you build your price perception also.

But this being said, Biedronka has not been just competitive on those categories, it's also on the other ones.

In terms of level of promotions, I would say that this quarter was probably less -- no, it was less -- slightly less than the first quarter of 2024. But this had to do a lot with the dynamic of the market and what I just said. I think that most food retailers were really pressured with a double-digit increase in labor cost last year and simultaneously with deflation at the top line. So this was quite tough and really led to a more intense competition.

And I think that this dynamic is what explains. Of course, if we look ahead, we will have a Q2 with Easter. It's true that Easter also brings some extra promotional activity and not just Easter, all the peaks in sales are usually the ones that are more promotional and we have in Colombia [indiscernible] which is quite important also as a peak of sales in Q2. So this can have also an impact on the mix.

What I can say is that Biedronka, and I think I mentioned that on the full year conference call, Biedronka will do its best, of course, to protect profitability, but will not lose competitiveness. And this will really depend also on the reaction of the consumers and on the competition moves in the market.

[Operator]

Now we will proceed with our next question and it comes from the line of Frederick Wild from Jefferies.

[Frederick Wild, analyst]

First, could you give us a little more detail on consumer behavior into the quarter and out of it? Whether you're seeing any changes there and how it evolved through the quarter? Obviously, there are quite a few moving parts with Easter within that.

Second, could you give us a more precise basket inflation figure at Biedronka, please? I think it should be about plus 1%, if you confirm that, that would be super helpful.

And then finally, just on -- from William's question on margin. You said at the full year call that Biedronka margins should be down. Is that still what you believe or is there now a bit more flexibility? Could we see full year Biedronka margins flat or even slightly better?

[Ana Virgínia, executive]

Hi, Fred, good morning. So on consumer behavior. So 2 things, of course, that we monitor quite carefully. One, of course, is the progression of the -- and the official numbers that the statistics office provides to the market. And on these numbers, we continue to see, let's say, a cautious or refrained consumer, particularly in what food is concerned. So there was a pickup in durable goods from what we saw, but not really on food throughout the quarter, and this even taking into consideration the calendar effect, of course, that we have to take out. So the underlying, let's say, progression in terms of consumer demand continues to be quite challenged.

On our sales. What we see also is the consumer quite price sensitive. So not really -- as I usually say, not really trading down. In fact, they have more disposable income, but we don't see really a pickup at least on this first quarter.

This being said, this is a very difficult quarter for us to extrapolate much. Of course, we have quite detailed information, but some of the movements are really very difficult to see because they really have to do with calendar and even with the Easter effect.

On basket inflation, it was really a very low -- in this quarter, it was a very low single digit. So I would say more or less in line with what you mentioned.

And as for the EBITDA margin, so what I mentioned is that we could not exclude being more pressured, although not with the same pressure than last year because we were seeing and we would have to raise salaries in line with a quite high single-digit minimum wage increase. And this, of course, would make more dependence on top line progression to really be able to dilute that. Although we will do our best, again, and I think that the company, after quite a while and a number of quarters when this pressure was really very hard, is somehow managing and it's no longer a surprise or a sharp change in terms of cost.

So we were already expecting this. So I also didn't exclude to have a stable EBITDA margin, of course. But this will really depend again on the competitiveness in the market and on the consumer behavior once again.

From our part, the company is doing all its best to really manage very tightly to, if it has to invest more, at least not to dilute so much or not to pressure so much the EBITDA margin. We do not exclude it, but we do not exclude it also to have a stable margin for the year.

[Operator]

Now we're going to take our next question and it comes from the line of Michal Potyra from UBS.

[Michal Potyra, analyst]

It's me Michal Potyra from UBS. Some were already asked, so maybe just a little bit of follow-up. Just on especially the gross margin performance. So the second quarter last year, I understand, was materially impacted by the increase in VAT in Poland. And I remember back then, you said you were not passing on the tax increase or at least not in full.

So perhaps you can give a little bit more color how that should be visible in your P&L next quarter, please? So that's the first question.

The second question, again, a follow-up on the competitive environment. There was an article in the press today from one of your peers, Netto, basically saying that the price war in Poland is over. So perhaps you can comment on that.

And the third one on HeBe, if you could also provide a little bit more color. Is that lower margin profile just like a 1Q phenomenon or something we should expect in the remainder of the year as well?

[Ana Virgínia, executive]

Thank you, Michal. So on gross margin, true. April last year was quite pressured by the fact that we had the government putting back the VAT on the staples, so on the basic products. And we didn't pass it to the consumer on general. So we have, let's say, it could be an easier comp for April.

But of course, we also have to take into consideration all the other moving parts, and that has to do even usually, as I said, all the peaks of sales in Poland, considering the competition and -- or the level of competition. You have to take into consideration that Easter and [indiscernible] to be quite important times where we do more promotions to drive sales and take advantage of that period.

So at this point, I wouldn't say, but it's true that we pressured last year in Q2 in April, more specifically, and we have that question of not passing the VAT when this was put back by the government.

On the competitive environment. So we don't like to call it a price war because, in fact, it's true that it was much more intense when -- as I said, when you have all the, let's say, all the drivers of the business being pressured for all the players considering the correction of the inflationary period. So with no help from inflation, as I said, you have much more pressure to fight for volumes. And this was really the big hit, I would say, from last year.

Meanwhile, when I look at the Polish market, I would say that it continues to be a very competitive market. And I would mention that even Netto is probably feeling that. Of course, if they feel that, it's a little bit more easy probably. It's because that, I can say, for sure, it's much easier to manage with a slight inflation, as I usually say, than managing with a strong single-digit deflation, which is terrible in all senses because you have to push for volume, but volumes also bring higher costs. And sometimes if you have deflation in your prices, really don't bring you the value for the sales and that is really a very hard and quite a schizophrenic point of the market to be in for the mass market food retail.

On HeBe, so it's true that the first quarter is also not the most important. So in terms of seasonality for the health and beauty market. But what we see is also some escalation in the -- a little bit similar to what we saw in food last year. So this quarter HeBe operated with a quite significant deflation. And this has to do really with the dynamics of the market. So a much more competitive market that is also being pressured on the labor costs.

So this being said, we count, of course, now the company also reacting and being able to accommodate somehow. So we do not expect, of course, the same level of pressure, but it's going to be a tough market, nevertheless, in the health and beauty, [ don't hide ].

[Operator]

Now, we're going to take our next question, and the question comes from the line of Izabel Dobreva from Morgan Stanley.

[Izabel Dobreva, analyst]

I had a couple on Poland. Firstly, just to go back on the Biedronka margin as a follow-up. Could you clarify whether it's reasonable to assume that Q1 was the toughest point for margins in the year given the strong calendar effects that we were aware of and the deeply negative like-for-like at the headline level? So is it reasonable to assume that Q1 margin was sort of as bad as it gets in terms of the trend?

And then my second question is thinking a little bit more about the Biedronka gross margin into Q2. So putting it all together, should we assume that the gross margin in Q2 may be down a little bit for Biedronka given that there will be, again, the reversal of the calendar effect in that quarter and more Easter promotions? Is that the right way to think about it given gross margin was up last year during Q2 on calendar impact partly?

And then my final question is just the Sunday trading ban. Could you give us an update on what is the latest you're hearing on that? And if it does get lifted, what impact do you expect on your business?

[Ana Virgínia, executive]

Hi, good morning, Izabel. So usually, it's true that when we say that Q1 is the toughest, I wouldn't say that way, I think Q1 is 90 days usually. So it's true that it really amplifies and means that if it's usually the lowest in terms of sales, as we are mainly a company with fixed costs, it tends to be, in principle, a little bit more difficult when it comes to margins.

But this being said, I think that I flagged already last year when we compare -- and if we do just the comparison with last year, of course, we have all -- or it was the first quarter when we felt -- not the first, in fact it was Q4 2023 when we start having the first signs of a correction, a strong correction, and a sharp decrease in inflation -- in basket inflation. But last year, we had deflation. And of course, this really puts a lot of pressure on the business.

So this one -- this year, I cannot say that probably the Q1 will be the toughest when it comes to comparables. This being said, in Q2 I don't remember really that Biedronka has increased their gross margin. We do not guide for gross margin, even not for EBITDA margin, in fact. But I would say that from what I remember, it's true that we managed to be quite resilient by then, but we continued to have a decrease in our gross margin in Biedronka because of all the pressure and because of even the VAT that Michal mentioned earlier, was also another source of pressure.

So I would say that, as we mentioned, first half is -- would be, I would say, quite challenging. We'll have other kinds of challenges in the second half, and we flagged that it will depend on consumer behavior. But this being said, I think that we have a lot of moving parts in the margin to manage and we'll try to do our best, of course, as I said, to protect profitability without giving any space to lose competitiveness with sales and without losing the preference of the consumer. That is the most important for us.

So the way that the margins will progress will depend really on these variables. So if we manage to protect, yes, of course, we'll deliver the best possible margin. But this will mean that we will keep competitiveness for -- to get the market and to get the sales that are quite important for us.

On Sunday ban, I don't have any news at this point. So sometimes, there are some news that maybe the government will get back or not. I think it has some positives. Of course, it will also mean getting back to a different dynamic for our operations. We are now used to operate with the ban, but I think that if all operators will be able to be open on Sunday, that will also have a positive impact on overall.

[Operator]

[Operator Instructions] And now we're going to take our next question and it comes from the line of Robert Joyce from BNP Paribas.

[Robert Joyce, analyst]

So first one, just you mentioned you gained in Poland 30 basis points of market share in the period. Can you just give us a view of what you think the market growth was in that -- in the period and what the volume inflation mix is in that?

Yes. Helpful to do it one by one actually, if we could start with that, please.

[Ana Virgínia, executive]

Okay. Good morning, Rob. No worries. So on the 30 basis points that market share increase, I think really this is a very remarkable performance by our banner in Poland. And I think that after so many years adding market share, and in this kind of context, I think it's a very good market share progression, I would say that probably due to calendar effect because we are talking about 3 months' market share. So it's the year-to-date March that we are providing. I would say that I wouldn't be expecting the market to have grown in volume, on the contrary, due to the lack of Easter and the leap year, Rob.

So I would say that we will be talking about gaining share in a market that in this particular quarter didn't grow.

[Robert Joyce, analyst]

Okay, okay. So the market -- you think it's a volume share gain, so the market arguably did a lower than 4% negative volume in the period.

[Ana Virgínia, executive]

When I say that the market has -- so we didn't gain volume either, but this has to do with a lot of calendar -- with calendar.

[Robert Joyce, analyst]

Okay. Understood. And then if I look at the rest of the year, consensus has sort of like-for-likes getting to, I think, above 5% for most of the rest of the year. Is that sort of consistent with the performance you've seen in the first quarter or at least the exit rates?

[Ana Virgínia, executive]

On that, Rob, of course, we will not guide. I think it's going to be very challenging to have 5% like-for-like, considering all that we are seeing in the market currently. So this will not -- as I said, we will fight to have the best performance possible at the sales level, while also protecting our profitability.

But this being said, I think it's quite challenging the number that is being considered. When we take into consideration the base from where Biedronka will have to grow. So this, again, will depend a lot on consumer behavior and even on consumer trading up at a certain point because the volumes base is completely and very challenging not only in the market, but particularly in Biedronka, that gained a lot of volume last year.

[Robert Joyce, analyst]

Okay. And then last one, just I think this is going to be explained by the VAT, but it looks like the inflation in terms of food and beverage CPI in Poland sort of fell from high 6s to sort of low 5s in April. Is that purely the VAT thing? Or is there anything in terms of inflation outlook we should be aware of?

[Ana Virgínia, executive]

So of course, it's difficult to comment on the official statistics because, as I have been mentioning, I think that there are some loopholes there. But I would say that what happened in April was mainly the VAT because for the consumers, of course, you have the numbers with VAT and the fact that we are now comparing with a period where you have put back the VAT in April last year, it's fully comparable in a certain sense. And so I think that most of the change in the inflation was really from -- driven by the VAT effect.

[Robert Joyce, analyst]

Okay. Very, very helpful. Just to wrap up on that. Where is your food inflation in your own basket running at, at the moment?

[Ana Virgínia, executive]

We are not commenting on that. What we said for the quarter, it is very low single digits.

[Operator]

We're going to take our next question, and the question comes from line of António Seladas from A|S Independent Research.

[António Seladas, analyst]

I just have a small question in terms of working capital. You mentioned or you explained that it's mainly a seasonal impact. Nevertheless, when you look for your investment on working capital for the last 2 years, we noticed clearly deterioration.

So my question, should we expect this kind of performance to continue? Or do you think that working capital will improve from now on?

[Ana Virgínia, executive]

Hi, António. So as we've been mentioning, it's true that there has been a correction in the working capital. In this particular quarter, what you have to take into consideration is really, I would say, compared with the other years is the impact of not having Easter. So you have already all the investment in the stocks for this season and we estimate that to be EUR 200 million. So it's quite significant when we are looking just at the cutoff on 31st March.

This being said, I wouldn't be expecting on average with the exception of some, let's say, of the calendar point and depending on the day that we will be reporting the numbers and finishing the different quarters.

Overall and on average, I do not expect a deterioration of the working capital. This being said, the working capital and the term conditions and even the level of stock is part of the drivers that we have to manage when we negotiate also with suppliers. So we will use the working capital from a tactical and strategical point of view, together with all the other profitability drivers.

[António Seladas, analyst]

Yes. Okay. So that is also related with gross margin, yes.

[Ana Virgínia, executive]

It may -- of course, I would say that currently, it's quite indirect, but of course, it also relates because as I usually say, we have to give, for instance, better conditions to some of our smaller suppliers if we want to have alternatives in terms of supply for certain products. And alternatives, of course, bring us the possibility of not -- of having better cost of goods sold, of course.

[Operator]

[Operator Instructions] And now we're going to take our next question and it comes from the line of Izabel Dobreva from Morgan Stanley.

[Izabel Dobreva, analyst]

I have a small follow-up just on the like-for-like. I wanted to clarify, when you say that 5% will be hard to reach, are you referring to the full year or the second half of the year? And the reason I ask is because the consensus for the full year is actually 3%, not 5%, and it's 5% to the latter part of the year. So I wanted to understand does your comments relate specifically to the full year given the difficult Q1? Or are you also saying that the second half of the year, it will be difficult to have 5% like-for-like?

And then just a small one, could you give us some clarity on the calendar impact for Q2?

[Ana Virgínia, executive]

Hi, Izabel. So thank you, and thank you for giving me the opportunity to clarify. So what I was saying was having a 5% for the full year. It was what I understood really from the question of Rob, probably not to -- so what I said is really that I think that 5% is very ambitious to have for the full year.

For the remaining, I think it's tough again. And again, it will depend on consumers. But this is something completely different if we just talk about the remaining of the year.

On the calendar effect, I would say that at least -- if we are talking about the effect of Easter, I would say for the full quarter, it's probably between 2 and 2.5.

[Operator]

Dear speakers, there are no further questions for today. I would now like to hand the conference over to your speaker, Ana Luisa Virginia, for any closing remarks.

[Ana Virgínia, executive]

So I would like to conclude just by saying that, as anticipated, Q1 was indeed challenging, but the teams did a great job in managing all the uncertainty and volatility the quarter offered. Our banners will continue to invest to safeguard competitiveness and improve the quality of operations on the ground.

The figures presented today confirm the strength of our market position and the focus of our teams in each market where we operate.

Thank you for your questions and for attending this conference call. I wish you all a nice day.

[Operator]

This concludes today's conference call. Thank you for participating. You may now disconnect. Have a nice day.