C&A Modas (CEAB3) Q4 2024 earnings summary

Executive summary

• Achieved robust double-digit growth in Apparel, with same-store sales up 14.4% in Q4 and 16.4% for the full year, supported by operational agility, enhanced brand positioning, and digital sales performance.

• Gross margin in Apparel reached a record 56.6% in Q4, and adjusted net income hit R$250.1 million, both historic highs since IPO.

• The Energia C&A strategy and digital initiatives drove transformation, with a 93% increase in monthly active app users and a 58% rise in Black Friday searches.

• Customer base expanded 7.6% in 2024, with NPS up by 6.8 points, reflecting improved customer satisfaction.

• Recognized with over 25 awards, including inclusion in major sustainability and workplace rankings.

Financial highlights

• Pre-IFRS 16 EBITDA surpassed R$975.9 million for the year; post-IFRS 16 adjusted EBITDA margin reached 23.3%.

• CapEx totaled R$359.7 million in 2024, up 67.1% year-over-year, focused on technology, digital, and store renovations.

• Ended 2024 with R$1.6 billion in cash and net debt/EBITDA ratio reduced to 0.5x.

• Merchandise gross margin improved to 54.9% in Q4, up 1.7 p.p. year-over-year; apparel gross margin at 56.6%.

• Adjusted net profit for Q4 was R$250.1 million, a 75.6% increase versus Q4 2023.

Outlook and guidance

• Expecting continued growth in sales per square meter, targeting a 35%-40% increase over the medium term.

• Gross margin for Apparel projected to remain steady or see marginal gains in 2025, with FX and raw material costs as key variables.

• Capital allocation will prioritize store renovations, technology, and omni-channel integration, with a cautious approach to new store openings due to macroeconomic uncertainty.

• Operating leverage improvement targeted for 2025 as Energia C&A enters its second year.

• Management expects continued growth in 2025, driven by strategic execution and disciplined capital allocation.