Raia Drogasil (RADL3) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 results with gross revenue of R$10.75 billion, up 15.9% year-over-year, and 72 net pharmacy openings, expanding to 3,139 units in 610 cities.

• Digital sales surged 40.2% to R$1.9 billion, representing 19% of retail revenue, with 75% of customers using the app and rapid delivery capabilities.

• Achieved 49.1 million active customers and processed 102.6 million tickets in the quarter, with NPS reaching 91% in stores and 73% in the app.

• National market share increased to 16.0%, up 0.3 pp year-over-year, with presence in every Brazilian state.

• Maintained guidance for 280-300 new store openings for the year, focusing on geographic and demographic diversification.

Financial highlights

• Adjusted EBITDA was R$810.8 million, up 23.2% year-over-year, with a margin of 7.5%.

• Adjusted net income was R$336.8 million, up 25.5% year-over-year, with a margin of 3.1%.

• Free cash flow reached R$700.6 million, and total cash generation was R$657.6 million.

• Gross margin was 27.6%, with a contribution margin of 10.5%.

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

Outlook and guidance

• Guidance maintained for 280-300 gross pharmacy openings per year for 2024 and 2025, with robust store maturation and assertiveness in new locations.

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

• Expect continued margin expansion through G&A dilution and digital growth, with confidence in maintaining strong performance into Q4 and beyond.