In This Article:
Release Date: February 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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C & A Modas SA (BSP:CEAB3) achieved a 14.4% increase in same-store sales for Q4 2024, marking a 35% growth over two years.
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The company's gross margin in apparel reached a record-breaking 56.6% for the fourth quarter.
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C & A Modas SA's adjusted net income reached 250 million, a record for the fourth quarter.
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The company ended the year with a strong cash position of 1.6 billion and reduced leverage to 0.5 times the net debt to EBITDA ratio.
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The active customer base grew by 7.6% and the Net Promoter Score (NPS) increased by nearly 7%, indicating high customer satisfaction.
Negative Points
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The company faced challenges with macroeconomic conditions, which required preventive adjustments in their credit granting model.
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Operating expenses increased by 1.2% points as a percentage of net revenue due to higher investments in marketing and logistics.
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C & A Modas SA's credit tool, CNA Pay, saw a slight reduction in retail sales share due to more selective credit granting.
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The company anticipates potential challenges in maintaining gross margin levels due to cost inflation and exchange rate impacts.
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There is uncertainty regarding the level of return on new store openings due to high interest rates, leading to cautious capital allocation.
Q & A Highlights
Q: Can you provide details on the sales dynamics in Q4 2024 and the start of 2025, considering the economic slowdown observed in December? How much of the 14.5% same-store sales growth is attributed to price versus volume? A: Paulo Correa, CEO, explained that sales dynamics can be influenced by various factors such as weather. Despite challenges, C&A maintained consistency in sales both in Q4 and early 2025. The growth in same-store sales is balanced, with approximately 50% attributed to price and 50% to volume. The company continues to focus on foundational improvements through the GSCNA strategy to sustain growth.
Q: How is the GSCNA strategy progressing, and what percentage of benefits have been captured so far? A: Paulo Correa noted that the GSCNA strategy is a three-year plan, with the first year focused on testing and piloting initiatives. Approximately 25% of the benefits have been captured in the first year, with more significant gains expected in the second and third years as rollouts continue.
Q: What are the dynamics of credit granting for C&A Pay, and could this impact growth? A: Lawrence Beltran Gomez, CFO, stated that C&A Pay's credit granting model has been adjusted preventively based on economic indicators, leading to a slight reduction in penetration. However, credit remains a key relationship tool rather than a sole growth driver. The company is focused on sustainable growth through product quality and customer relationships.