In This Article:
Release Date: August 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Vivara Participacoes SA (BSP:VIVA3) reported a 27% growth in sales for May and June, attributed to improved stock allocation across all stores.
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The company is experiencing acceleration in growth, particularly in its brick-and-mortar channels, due to strategic initiatives in product mix and talent acquisition.
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Vivara has increased its production capacity in Manaus, with metal purchases rising from 80 kilos to over 140 kilos per month, indicating a strong product strategy.
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The company is implementing new store formats that are expected to enhance customer experience and sales, with a focus on modern design and architecture.
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Operational efficiencies have been achieved through a reduction in office staff and optimization of expenses, contributing to improved EBITDA margins.
Negative Points
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Despite the growth, there is still room for improvement in inventory management, which could further enhance sales performance.
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The company has faced challenges with sales personnel commissions, leading to adjustments and layoffs, which may impact employee morale.
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Vivara's expenses have been reduced significantly, but this has involved laying off staff and restructuring, which could affect operational stability.
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The new store formats have not yet been launched, and their impact on sales and customer experience remains to be seen.
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There is a noted slowdown in the Life brand's performance, possibly due to normalization of the base, indicating potential challenges in maintaining growth momentum.
Q & A Highlights
Q: You mentioned a 27% growth in sales for May and June. Is this growth seen across all stores, and do you expect this trend to continue? Also, could you elaborate on the production acceleration projects in Manaus and their expected impact on gross margins? A: The growth is across all stores, driven by improved stock allocation and a focus on gold and jewelry. We expect continued acceleration in both Vivara and Life stores. In Manaus, production has increased from 80 to over 140 kilos per month, with a workforce expansion from 800 to over 1,000 people. We anticipate seeing the full benefits of these initiatives by the end of next year, impacting our product mix and gross margins positively.
Q: Can you explain the new store formats and their impact on sales? Also, how have sales personnel commissions been adjusted, and what is the expected impact on expenses? A: The new store formats focus on product, price, advertisement, and people. We are increasing inventory to improve returns and have revamped our store design for better customer engagement. Sales personnel commissions have been adjusted, leading to a reduction in expenses. We have streamlined our workforce, reducing office staff from 500 to 150, and are focusing on operational efficiency to further reduce costs.