Lojas Renner (LREN3) Q3 2024 earnings summary

Executive summary

• Achieved fourth consecutive quarter of sales growth, with a 13% increase in apparel sales in Brazil, nearly double the market average, and significant margin expansion supported by operational leverage and improved financial cycle by 10 days.

• Implemented a more agile, integrated, and precise operating model, enhancing competitiveness, profitability, and customer experience, with record NPS and an active customer base of 19.3 million.

• Continued digital acceleration and omnichannel excellence, expanding market reach and improving customer experience.

• Realize financial services delivered its fourth consecutive quarter of positive results, with EBITDA of R$58 million, representing 10.1% of total EBITDA.

• Strong engagement and record-high team motivation contributed to operational momentum and value generation.

Financial highlights

• Retailing net revenue grew 12.1% year-over-year to R$2,956 million in 3Q24; same store sales up 11.5%.

• Net income reached R$255.3 million, a 47.6% year-over-year increase; net income margin improved to 8.6% from 6.6%.

• Adjusted EBITDA grew 59.1% year-over-year to R$576.8 million, with a 5.7p.p. margin improvement.

• Free cash flow reached R$412 million in 3Q24, with a robust cash position of R$2.6 billion and net cash of R$1.4 billion.

• Digital GMV increased 24% in the quarter to R$656 million, with digital sales penetration at 16.7%.

Outlook and guidance

• Entering a new growth and profitability cycle with no need for substantial infrastructure investments.

• Expectation of gradual gross margin growth, aiming to surpass historical best levels, with a competitive price positioning.

• Anticipate continued leverage of revenue growth over expenses through 2025–2027, supporting operating margin expansion.

• Positive outlook for year-end sales events, with strong preparation for Black Friday, Christmas, and summer campaigns.

• Management expects continued value creation by leveraging operational improvements and market opportunities.