Companhia Brasileira de Distribuicao (PCAR3) Q2 2024 earnings summary

Executive summary

• Achieved record gross margin of 28.2% in 2Q24, up 1.9 p.p. year-over-year, with adjusted EBITDA margin rising 2.1 p.p. to 8.8% and adjusted EBITDA up 34.8% vs. 2Q23.

• Sequential reduction in financial leverage (pre-IFRS 16) to 2.8x, with net debt down R$1.2 billion year-over-year.

• Operational free cash flow reached R$272 million in the last 12 months, a R$498 million improvement year-over-year.

• Strong sales growth in Proximity (+22.5%) and e-commerce (+15.6%), with market share gains in São Paulo (+0.7 p.p.).

• Casino Group reduced its stake to 22.5%, relinquishing control and leading to a new board with majority independent members.

Financial highlights

• Gross revenue reached R$4.8 billion in 2Q24, up 2.1% year-over-year; same-store sales grew 3.4% excluding calendar effects.

• Gross profit was R$1.3 billion (+9.9% YoY), with gross margin at 28.2% (+1.9 p.p. YoY).

• Adjusted EBITDA was R$396 million (+34.8% YoY), margin improved to 8.8% (+2.1 p.p. YoY).

• Net loss from continuing operations improved to R$272 million, a 15.9% reduction year-over-year.

• Free operational cash flow was R$272 million in the last 12 months, a R$498 million improvement.

Outlook and guidance

• Focus on further margin expansion, operational efficiency, and continued deleveraging, with ongoing store expansion and digital growth.

• Margin improvements anticipated from retail media and promotional efficiency projects, with broader rollout in H2 2024.

• Market share gains in São Paulo and strong performance in proximity and digital formats are expected to support future growth.