Track & Field Co (TFCO4) Q2 2024 earnings summary

Executive summary

• Achieved record sell-out of R$320.1 million in Q2 2024, up 21.5% year-over-year, with same-store sales growth of 16.4% and strong e-commerce expansion.

• Net revenue for Q2 2024 reached R$192.0 million, up 23.3% YoY, with robust growth across all channels, driven by product innovation, store renovations, digital initiatives, and holiday sales.

• Opened 15 new stores and renovated 14 in Q2, ending with 374 stores, and expanded omnichannel and digital initiatives, including the infinite shelf and ship-from-store strategies.

• TFSports platform saw user growth of 44.5% YoY, hosting over 680 events and winning major awards, with net revenue up 92.1% to R$17.1 million.

• Operational cash generation reached R$80.7 million, up 176.9% YoY, supporting investments in store expansion and digital initiatives.

Financial highlights

• Net revenue: R$192.0 million (+23.3% YoY); gross profit: R$107.2 million (+20.6% YoY); gross margin: 55.8% (-1.3 p.p. YoY) due to higher event share in sales mix.

• Adjusted EBITDA: R$41.3 million (+14.5% YoY), margin 21.5% (-1.7 p.p. YoY); excluding TFSports, adjusted EBITDA: R$45.0 million (+18.3% YoY), margin 25.3%.

• Adjusted net income: R$30.1 million (+8.3% YoY), margin 15.7% (-2.2 p.p. YoY); excluding TFSports, R$34.9 million (+14.9% YoY), margin 19.7%.

• Operational cash generation: R$80.7 million (+176.9% YoY); net cash: R$67.0 million (+67.8% YoY); cash equivalents including receivables totaled R$136.8 million.

• Operating expenses were 34.5% of net sales in Q2, slightly higher YoY due to TFSports acceleration.

Outlook and guidance

• Management targets 40 new store openings and over 40 renovations in 2024, aiming for about half the network in the new format by year-end.

• Continued focus on omnichannel integration, digitalization, and franchise expansion to drive future growth.

• International expansion being tested in Portugal, with further European and Latin American opportunities under consideration.