Grupo Gigante (GIGANTE) Q1 2024 earnings summary

Executive summary

• Q1 revenue declined 2.1% YoY to MXN 8,329.3m, while gross margin improved 170 bps to 42.0%; EBITDA fell 3.8% and consolidated net income rose 0.3%.

• Operations spanned specialized retail, restaurants, services and real estate, with 701 units at quarter-end, including 7 closed for remodeling.

Financial highlights

• Revenue was MXN 8,329.3m, down 2.1% YoY; same-store sales decreased 2.8% to MXN 7,964.8m.

• Cost of sales fell 4.9% to MXN 4,830.9m, or 58.0% of revenue vs. 59.7%; gross profit rose 2.0% to MXN 3,498.4m, with gross margin at 42.0% vs. 40.3%.

• Operating income was MXN 754.9m vs. MXN 764.8m; EBITDA, as defined in the commentary, was MXN 1,166.9m, down 3.8% YoY.

• Consolidated net income was MXN 286.1m, up 0.3% YoY; basic and diluted EPS were MXN 0.26 vs. MXN 0.25.

• Finance costs were MXN 515.2m vs. MXN 483.6m; share of profit from associates and joint ventures was MXN 89.5m, essentially flat YoY.

Outlook and guidance

• Priorities include disciplined debt management, organic growth focused on cash generation and profitability, e-commerce, shared technology and logistics capabilities, digital transformation, and selective expansion; no numerical targets were stated.

• Management also cited efficiency, talent development, sustainability and selective inorganic growth opportunities as continuing strategic priorities.