Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Quarterly active customers grew year over year for the first time since Q3 2022, improving by 1% to 2 million.
- The 90-day repurchase rate increased by 304 basis points year over year, indicating higher customer retention.
- GMV grew by 29% in constant currency, showing strong underlying demand despite currency devaluations.
- Jumia successfully consolidated several warehouses into larger, more tech-enabled locations, enhancing logistics efficiency.
- The company completed an at-the-market offering, generating $94.7 million in net proceeds, strengthening its liquidity position.
Negative Points
- Revenue declined 13% year over year to $36.4 million, impacted by currency devaluations.
- Operating loss increased to $20.1 million in Q3 2024 from $18.3 million in Q3 2023.
- Adjusted EBITDA loss increased to $17 million from a loss of $14.8 million in the previous year.
- The relocation of fulfillment centers caused temporary disruptions and increased expenses in Q3 2024.
- Jumia exited operations in South Africa and Tunisia, incurring costs associated with market closures.
Q & A Highlights
Q: There's a significant gap between GMV growth and order growth. Can you explain the drivers behind this difference?
A: Antoine Maillet-Mezeray, Executive Vice President - Finance and Operations, explained that the gap is due to a shift in product mix towards higher-value categories like fashion and electronics, which have higher average order values. Additionally, inflation in countries with currency devaluations has increased product prices, contributing to higher basket sizes.
Q: What would be required to see a bigger acceleration in order growth?
A: Francis Dufay, CEO, emphasized that growth is driven by the value proposition, including supply and pricing, rather than increased marketing spend. The focus is on improving supply, particularly from Chinese vendors, and expanding into underserved regions to drive growth.
Q: Why did Jumia decide to exit South Africa and Tunisia?
A: Francis Dufay explained that South Africa's mature and competitive market dynamics, along with Jumia's non-core business model there, led to the decision. Tunisia's challenging local dynamics and lower market potential also influenced the exit to better allocate resources to more promising markets.
Q: How does Jumia plan to drive down EBITDA losses over time?
A: Antoine Maillet-Mezeray stated that profitability will result from top-line revenue growth and improved efficiency. Jumia has already reduced workforce and is focusing on enhancing margins and operational efficiency, such as through better fulfillment centers and marketing strategies.
Q: Can you elaborate on the impact of recent warehouse consolidations?
A: Antoine Maillet-Mezeray noted that while the consolidations caused temporary disruptions, they are expected to drive operational efficiencies and cost savings in the future, contributing to improved fulfillment costs and overall business efficiency.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
