Falabella (FALABELLA) Q3 2024 earnings summary

Executive summary

• Achieved strong operational and financial performance in Q3 2024, with all five business lines improving results and a focus on customer experience, profitability, and omnichannel strategy.

• Consolidated revenues rose 5.8% year-over-year to $3,169 million, with net income of $97 million and EBITDA margin of 11.6%, the highest since 2021.

• E-commerce strategy delivered robust growth, with online GMV up 15% to $674 million and over 40% of sales now through digital platforms.

• Banking operations saw improved risk metrics and portfolio growth in Chile, with consolidated NPL ratio at 3.6% and continued leadership in current accounts.

• Selective physical expansion continued, including new IKEA and Sodimac stores, and Mallplaza's capital increase was completed.

Financial highlights

• Total revenue rose 6% year-over-year to $3,169 million, led by Home Improvement (+7%), Falabella Retail (+9%), and Tottus (+12%).

• Gross profit expanded 20% year-over-year to $1,186 million, with gross margin improving to 37.4% from 33.1%.

• EBITDA grew 82% year-over-year to $368 million, with an EBITDA margin of 11.6%, up from 6.7% in Q3 2023.

• Net profit reached $97 million, a significant turnaround from a $5 million loss in Q3 2023.

• SG&A/revenue ratio improved to 29.8% from 30.7% a year ago, reflecting operational efficiency.

Outlook and guidance

• Entering a new phase focused on sustainable and selective growth, leveraging brand strength, omnichannel capabilities, and ecosystem development.

• S&P revised outlook from Negative to Stable, maintaining a BB+ rating due to improved operating performance.

• Expect continued portfolio expansion in banking, especially in Chile, with risk metrics at historical levels.

• Planning for 2025 includes growth in Sodimac Mexico, Tottus and Sodimac in Peru, and further digital banking and e-commerce consolidation.

• Positive trends in Peru and Chile expected to continue into Q4, with strong holiday season anticipated.