Raia Drogasil (RADL3) Q3 2024 earnings summary

Executive summary

• Gross revenue reached R$10.75 billion in Q3 2024, up 15.9% year-over-year, with 72 net pharmacy openings, expanding to 3,139 units in 610 cities and 49.1 million active customers.

• Digital sales surged 40.2% to R$1.86 billion, achieving 19.0% retail penetration, with 75% of digital sales via app and 102.6 million transactions in the quarter.

• Adjusted EBITDA rose 23.2% to R$810.8 million (7.5% margin), and adjusted net income increased 25.5% to R$336.8 million (3.1% margin).

• Free cash flow was R$700.6 million, with total cash generation of R$657.6 million and leverage at 1.0x EBITDA.

• NPS reached 91% in stores, reflecting high customer satisfaction.

Financial highlights

• Gross profit was R$2.97 billion (27.6% margin), slightly down 0.2 pp year-over-year due to 4Bio mix and new tax effects.

• Selling expenses were R$1.84 billion (17.1% of revenue), diluted by 0.3 pp, and G&A expenses were R$323.1 million (3.0% of revenue), also diluted by 0.3 pp.

• Contribution margin increased 17.5% to R$1.13 billion (10.5% margin), and EBT rose 44.7% to R$437.4 million (4.1% margin).

• Net financial expenses fell to 1.3% of revenue, mainly due to lower SELIC rates.

• Cash cycle improved to 59.6 days, down 3.3 days year-over-year.

Outlook and guidance

• Expansion plan targets 280–300 gross store openings per year for 2024 and 2025, with 68% of new stores outside São Paulo.

• Continued investment in digital channels, health services, and marketplace expansion to drive growth.

• Store maturation process remains robust, with 98% assertiveness in LTM openings.