Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Veste SA Estilo (BSP:VSTE3, Financial) achieved its 14th consecutive quarter of growth in same-store sales.
- The digital channel grew by 11.3% in the first nine months of the year, building on a strong growth base from the previous year.
- The company has successfully implemented new architectural concepts in physical stores, leading to a 31% sales increase at the Flamboyant Shopping location.
- Lily's brand saw a 5.6% growth with same-store sales increasing by 6.8%, despite supply chain challenges.
- The outlet channel experienced significant growth, with a 27.5% increase year-to-date, contributing to inventory reduction efforts.
Negative Points
- Overall gross revenue decreased by 2.7% year-over-year, largely due to a 16.5% decline in the B2B channel.
- John John brand faced a challenging period with a 29% turnover drop this quarter and a 25% year-to-date decline, resulting in the closure of 10 stores.
- Adjusted gross profit fell by 3.5% year-over-year, with the adjusted gross margin decreasing by 0.7 percentage points.
- The B2C channel experienced a 1.1% decline, with physical stores dropping by 3.3%, primarily due to the reduced number of John John stores.
- Adjusted EBITDA decreased by 12.1% year-over-year, with the adjusted EBITDA margin falling by 1.8 percentage points.
Q & A Highlights
Q: Can you discuss your plans for new store openings and renovations in 2025?
A: Alexandre Calixto Afrange, CEO: Our plan for 2025 is still being developed, but it will likely follow a similar path to 2024. Renovations are crucial for our growth, and we plan to maintain this strategy in the coming years. More details will be shared in future calls.
Q: How are suppliers impacting your numbers, and what role do they play in your company?
A: Alexandre Calixto Afrange, CEO: Suppliers are vital to our operations, and we maintain a close, healthy relationship with them. We faced some delivery issues this quarter, particularly affecting Lily and Bobo. We've reorganized to minimize these impacts and plan to expand our supplier base to prevent future disruptions.
Q: What are the main factors behind the decline in gross revenue and adjusted EBITDA?
A: Elisa Bastos de Lima, Investor Relations and Financial Planning Officer: The decline in gross revenue by 2.7% was largely due to a 16.5% drop in the B2B channel. Adjusted EBITDA fell by 12.1% mainly because of reduced sales, although expenses remained stable.
Q: How is the digital channel performing, and what are your future plans for it?
A: Elisa Bastos de Lima, Investor Relations and Financial Planning Officer: Our digital B2C channel grew by 6.8%, with a focus on profitability. We launched new apps for Dudalina and Invi, and the John John app is performing well, accounting for 21.5% of online sales in September.
Q: Can you elaborate on the performance of the B2B channel and its future outlook?
A: Alexandre Calixto Afrange, CEO: The B2B channel saw a 16.5% decline due to profitability adjustments. However, we expect significant growth in Q4 as we invoice the Summer 25 collection. We've restructured our approach, focusing on profitability and incorporating feedback into collections and pricing.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
