Fnac Darty (FNAC) Q3 2024 TU earnings summary

Executive summary

• 9M 2024 revenue reached €5,238 million, up 1.0% reported and down 0.2% like-for-like, with Q3 revenue at €1,849 million, up 0.5% reported and down 0.6% like-for-like, driven by varied offerings, product innovation, and high value-added services.

• Gross margin rate increased by 50 bps over nine months and over 100 bps in Q3, supported by services and favorable product mix.

• 2024 Current Operating Income (COI) target raised to exceed €180m, above the previous target and 2023's €171m.

• Strategic acquisition of Unieuro is progressing, with a 42% premium offered and the minimum acceptance threshold lowered to 66.67%, aiming to create a leading retail player in Western & Southern Europe.

• High single-digit growth in services and strong Iberian Peninsula performance offset stable or declining sales in other regions.

Financial highlights

• 9M 2024 revenue: €5,238 million (+1.0% reported, -0.2% like-for-like); Q3 2024 revenue: €1,849 million (+0.5% reported, -0.6% like-for-like).

• Gross margin rate up over 100 bps in Q3 and 50 bps over 9M, excluding franchise and scope effects.

• Online sales accounted for 21% of total, with over 50% using Click & Collect.

• Services segment delivered high single-digit growth.

• Iberian Peninsula posted 9M revenue of €536m (+1.8% like-for-like), Q3 +5.7% like-for-like, aided by macroeconomic improvement and MediaMarkt integration.

Outlook and guidance

• 2024 COI guidance raised to exceed €180m, up from at least €171m, assuming stable macro and geopolitical context.

• Cumulative free cash flow for 2021-2024 period targeted at €500m.

• Year-end sales events and anniversaries expected to be decisive for full-year results.

• Positive macro signals include decreasing inflation and interest rates.