Companhia Brasileira de Distribuicao (PCAR3) Q3 2024 earnings summary

Executive summary

• Achieved highest adjusted EBITDA margin since 2021 at 8.9%, marking eight consecutive quarters of growth, with gross margin up 1.1 p.p. year-over-year to 27.7%.

• Same-store sales grew 5.0% year-over-year, with Extra/Extra Mercado up 5.8%, Pão de Açúcar up 4.6%, and proximity format up 4.6%.

• E-commerce revenue rose 17.2% year-over-year, with digital penetration at 12.5% and perishables exceeding 35% of digital baskets.

• Net loss from continued operations was R$253 million, compared to a net income of R$805 million in Q3 2023, which included significant non-recurring gains.

• Net debt reduced by R$1.0 billion year-over-year, with pre-IFRS 16 leverage down to 2.9x from 8.8x.

Financial highlights

• Total Q3 revenue reached R$4.8 billion, up 1.9% year-over-year; net revenue was R$4.5 billion, up 2.8%.

• Adjusted EBITDA grew 22.6% year-over-year to R$399 million, with margin at a record 8.9%.

• Free operating cash flow for the last 12 months was R$366 million, up R$216 million year-over-year.

• Net loss from discontinued activities was R$58 million, mainly due to labor contingencies.

• Net financial result was a loss of R$189 million, reflecting lower financial revenues and reduced financial expenses.

Outlook and guidance

• Management expects continued gross margin expansion, driven by category management, retail media, and stockout reduction, with a focus on omnichannel expansion and operational efficiency.

• No specific mid-term gross margin guidance, but optimism for further gains as initiatives roll out across formats.

• Leverage target remains at 1–1.5x, considered sustainable for the business.

• Q4 started strong, with October showing meaningful market share gains, especially in São Paulo.

• Ongoing turnaround plan supported by consistent results and market share gains.