Lojas Quero-Quero (LJQQ3) Q3 2024 earnings summary

Executive summary

• Achieved strong revenue and EBITDA growth in Q3 2024, driven by retail recovery, operational leverage, and robust financial services performance.

• Operates 568 stores as of September 2024, with 17 new stores opened year-to-date and a focus on small and medium cities in southern Brazil, São Paulo, and Mato Grosso do Sul.

• Maintained conservative credit and collection practices, with improved delinquency rates and healthy portfolio growth.

• Offers a retail ecosystem including building materials, appliances, furniture, and financial services through VerdeCard.

• Emphasizes strong management, robust processes, and solid governance, with a long-tenured executive team.

Financial highlights

• Gross revenue reached R$2,967mn for the LTM ending 3Q24, with Q3 2024 retail sales up 14% year-over-year to BRL 587 million and same-store sales up 11%.

• Adjusted EBITDA reached BRL 31 million in Q3 2024, up 21% from Q3 2023; accounting EBITDA at BRL 58 million, up 27.8%.

• Gross profit increased 11% in Q3 2024; retail gross margin rose to 22.9% from 21.5% last year.

• Adjusted net profit was BRL 3 million, a significant improvement over the past two years.

• 3.9mn+ credit cards issued and 800k+ active credit cards as of 3Q24.

Outlook and guidance

• Positive trend in same-store sales expected to continue, excluding one-time flood effects.

• Plans to open 21 stores in 2024, maintaining selective expansion strategy and identifying over 900 cities with potential for expansion.

• Ongoing store model improvements and expansion of product mix, including the "Infinite Store" phygital initiative.

• Anticipates continued operational leverage and EBITDA growth as new stores mature.