Grazziotin (CGRA4) Q2 2024 earnings summary

Executive summary

• Second quarter of 2024 impacted by severe climate events in southern Brazil, affecting 20 stores directly and causing temporary closure of 11 others; two stores permanently closed.

• Net revenue grew 3.59% year-over-year, driven by cost optimization and inventory management.

• Grazziotin and Tottal brands saw sales growth of 8.5% and 12% respectively; two new stores opened and eight renovated.

• Grazziotin Financeira's net income rose 106% year-over-year, with credit recovery up 109%.

• Grato Agropecuária faced a 50% drop in corn productivity due to drought, while cotton harvest showed good results.

Financial highlights

• Consolidated net revenue for 2Q24 reached R$214.0 million, up 3.02% from 2Q23.

• Net income for the quarter was R$25.8 million, a 34.86% decrease year-over-year.

• EBITDA for 2Q24 was R$46.1 million, down 5.31% from 2Q23; EBITDA margin fell to 21.6%.

• Gross margin declined to 51.57% from 53.80% in 2Q23.

• Same-store sales fell 0.11% year-over-year; new stores contributed 2% of 2Q24 sales.

Outlook and guidance

• Continued investment in store expansion and modernization to enhance competitiveness and customer experience.

• Ongoing focus on disciplined credit policy and recovery to maintain low delinquency rates.

• Grato Agropecuária to prioritize irrigation projects and await optimal timing for cotton sales.