Lojas Renner (LREN3) Q4 2024 earnings summary

Executive summary

• Achieved 9.7% sales growth in Q4 2024 and 8.2% for the year, surpassing market averages for the fifth consecutive quarter, driven by increased transaction volume, pieces sold, and omni-channel integration.

• Record free cash flow generation: R$613 million in Q4 and R$1.5 billion for the year, with a robust cash position of R$2.8 billion and net cash of R$1.8 billion.

• Completed the largest investment cycle in company history, shifting future investments toward growth, digitalization, and omni-channel expansion.

• 20 million active customers in the ecosystem and improved NPS across all business units and channels.

• Announced share buyback program of up to 75 million shares (~7% of free float, ~R$1 billion).

Financial highlights

• Retailing net revenue reached R$12.67 billion for FY 2024 (+8.2% YoY); Q4 revenue was R$4.17 billion (+9.7% YoY).

• Adjusted EBITDA for FY 2024 was R$2.65 billion (+26% YoY, margin 20.9%); Q4 adjusted EBITDA was R$1.02 billion (margin 24.5%).

• Net income rose 22.6% to R$1.2 billion for the year (net margin 9.4%); Q4 net income was R$487.2 million, impacted by non-recurring items.

• Retail gross margin improved to 55.4% for FY 2024 (+0.9p.p. YoY); Q4 gross margin at 55.8%.

• SG&A as a percentage of sales/net revenue reduced by 0.8p.p. in Q4 and 1.3p.p. for the year.

Outlook and guidance

• 2025 capex guidance: R$850 million, focused on store remodels and 25–35 new stores (mainly Renner and Youcom, 1–2 Camicado), with 80% of new Renner stores in new markets.

• Ongoing digitalization, omni-channel expansion, and completion of e-commerce migration to the new distribution center by Q2 2025.

• Dividend payout ratio of 53% and share buyback program of approximately R$1 billion.

• Management expects external challenges in 2025 but aims to maintain above-market growth, healthy margins, and strong inventory management.