Release Date: November 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Atacadao SA (ATAAY, Financial) reported strong sales growth with a 5.6% increase in same-store sales, outpacing the entire retail market.
- The company opened a record number of new stores, including 14 Atacadao stores and seven Sam's Club stores, enhancing its market presence.
- Digital sales saw significant growth, with GMV reaching BRL3 billion, marking a 21% year-over-year increase.
- Carrefour Bank's earnings grew by 13% compared to the previous year, with a healthy delinquency curve.
- The company achieved a 48% reduction in emissions, surpassing its target by 10 percentage points, and received the Gold Stamp in the GHG protocol for its ESG efforts.
Negative Points
- Gross margin decreased by 89 basis points to 19.2%, impacted by Atacadao's larger relative share and new regulations limiting bank interest charges.
- SG&A expenses increased due to the expansion of the store network and cost inflation, despite efforts to reduce costs.
- The company's net debt increased by BRL4 billion, primarily due to a one-off working capital requirement.
- Sam's Club reported a decline in EBITDA, attributed to increased SG&A expenses from store expansions and promotional activities.
- The retail segment's gross margin decreased by 158 basis points, reflecting the new pricing strategy aimed at increasing competitiveness.
Q & A Highlights
Q: Can you explain the impact of food inflation on your Q3 performance and how it might affect future quarters?
A: Stephane Maquaire, CEO, explained that food inflation spiked due to events in Rio Grande do Sul, leading to deflation in July and August, followed by a slight inflation increase in September. This trend is expected to continue, positively impacting sales, especially in B2B with Atacadao. The company anticipates a positive Q4 with food inflation projected between 6% and 7% annually.
Q: How is the shift towards more B2C traffic at Atacadao affecting your gross margins?
A: Stephane Maquaire noted that Atacadao is focusing on strengthening B2C sales, which typically have slightly higher gross margins than B2B. The introduction of new services, which take about six months to mature, has temporarily pressured margins, but they are expected to stabilize by year-end.
Q: What are your expectations for working capital and its impact on sales?
A: Eric Alencar, CFO, clarified that the increased working capital in Q3 was a one-off event due to strong sales in September. The company expects working capital levels to normalize, with no structural changes anticipated. The focus remains on improving efficiency and maintaining stable accounts payable levels.
Q: Can you discuss the bank's performance and future expectations?
A: Eric Alencar highlighted that the bank's efficiency has improved, with EBITDA expected to be at least BRL50 million more than last year. The bank is increasing credit limits for reliable clients, aiming to enhance ROI. The impact of regulatory changes on revolving credit is being managed through cost discipline and product diversification.
Q: How do you view SG&A trends in light of inflation and sales dynamics?
A: Stephane Maquaire stated that the company is leveraging higher food inflation to streamline operations and reduce costs. The focus is on maintaining agility and competitiveness, with plans to invest in sales support while continuing to decrease SG&A as a percentage of sales.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
