In This Article:
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Net Revenue: Increased by 16.7% to BRL1.8 billion.
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Same Store Sales (Apparel): Grew by 18.9%.
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Gross Margin (Apparel): Reached 55.1%, the highest for a third quarter.
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EBITDA Margin: Increased by 4.4 percentage points to 17.6%.
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Adjusted Net Profit: BRL52 million, reversing the previous year's loss.
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Leverage: Net debt to EBITDA ratio improved to 1.0x.
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App Monthly Active Users: Increased by 120% year-over-year.
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Beauty Category Sales: Increased by nearly 64% compared to Q3 2023.
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Store Renovations: Reopened three iconic stores with major renovations.
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Debt: Total indebtedness at BRL878 million.
Release Date: November 07, 2024
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) reported a strong net revenue growth of 16.7%, reaching BRL1.8 billion.
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The company achieved a record gross margin for apparel at 55.1%, marking the 13th consecutive quarter of growth.
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EBITDA margin increased by 4.4 percentage points to 17.6%, indicating strong financial discipline.
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The company reversed its previous year's Q3 loss to an adjusted net profit of BRL52 million.
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C & A Modas SA's app saw a 120% increase in monthly active users, becoming the most downloaded fashion app in Brazil in September.
Negative Points
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Despite the growth, the average sales price was slightly below inflation, indicating potential pricing pressures.
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Operating expenses increased year over year, although they remained stable as a percentage of net revenue.
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The company is facing challenges with supplier financing and inventory management, as indicated by a worsening year-over-year comparison.
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C & A Pay's share in retail decreased slightly compared to the previous quarter, despite a 32% increase in net revenue.
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The company is accelerating the demobilization of the fashion TriC category, which may impact short-term sales dynamics.
Q & A Highlights
Q: Can you explain the drivers of growth in your high concept stores and the impact of C&A Pay on sales? A: The growth in high concept stores is driven by our ability to quickly propose and test new products, leading to significant performance improvements. C&A Pay plays a role in promoting retail sales, but the growth is primarily due to our commercial proposals and customer journeys. The macroeconomic environment also influences store performance.
Q: What are the future levers for value creation, and how does C&A Pay fit into your strategy? A: The energy strategy focuses on increasing sales per square meter and improving sales productivity. We aim to enhance product assortment, streamline customer journeys, and personalize customer relationships. C&A Pay supports retail sales and customer loyalty, with no significant impact from recent credit strategy adjustments.