Atacadão (CRFB3) Q2 2024 earnings summary

Executive summary

• Achieved strong operational and financial performance in Q2 2024, with notable resilience despite regional flooding impacts in Rio Grande do Sul.

• Adjusted EBITDA rose 20.2% year-over-year to R$1.6 billion, with margin up 58bps to 5.7%.

• Atacadão led growth with double-digit sales, while Retail returned to positive like-for-like growth after portfolio and pricing adjustments.

• Annualized synergies reached R$2.3 billion, surpassing the R$2 billion target 18 months ahead of schedule; synergy target raised to R$3 billion by end-2025.

• ESG initiatives advanced, including price freezes and food donations in flood-affected Rio Grande do Sul, and recognition as Brazil's most inclusive retailer.

Financial highlights

• Net sales grew 8.1% year-over-year to R$28.0 billion; consolidated gross sales rose 4.9% to R$30.5 billion.

• Adjusted net income was R$151 million, up from R$29 million in Q2 2023; net income group share reached R$330 million versus a loss last year.

• Gross margin declined 100 bps to 18.7% due to B2B volume recovery and aggressive sales campaigns.

• SG&A as a percentage of net sales decreased by 159bps to 13.0%.

• E-commerce GMV surged 41.3% to R$2.9 billion, with 1P food sales up 71.4%.

Outlook and guidance

• Synergy run-rate target increased to R$3 billion per year by end of 2025.

• Atacadão store opening guidance for 2024 increased to 20 stores, all conversions.

• Club segment plans to open 7-9 stores in 2024.

• 2024 capex guidance set at R$2.3–2.6 billion, significantly lower than 2023.