Track & Field Co (TFCO4) Q3 2024 earnings summary

Executive summary

• Net revenue for 3Q24 reached R$204.3 million, up 24.4% year-over-year, with strong growth across retail, franchise, and digital channels.

• Sell-out totaled R$344.3 million in 3Q24, a 17.1% increase YoY, driven by renovated stores, e-commerce, and events.

• E-commerce sales grew 47.7% YoY, now representing 10.5% of total sell-out, with omnichannel initiatives like 'ship from store' accounting for 67.2% of e-commerce sales.

• TFSports platform user base grew 45.6% YoY, hosting over 800 events and expanding digital engagement.

• The company ended the quarter with 381 stores, opening 7 new units and renovating 9, with 45% of the network expected to be remodeled by year-end.

Financial highlights

• Gross profit for 3Q24 was R$113.4 million, up 20.2% YoY; gross margin declined 1.9pp to 55.5% due to higher franchise sales and event acceleration.

• Adjusted EBITDA reached R$40.2 million (+9.1% YoY), with a margin of 19.7% (-2.7pp YoY); core EBITDA ex-TFSports was R$49.3 million (+25.5% YoY, 25.7% margin).

• Adjusted net income was R$26.9 million, down 7.7% YoY, reflecting increased event investments and higher depreciation.

• Operating cash flow for 9M24 was R$93.5 million, up 75.4% YoY; net cash position at period-end was R$47.4 million.

• No debt at quarter-end; cash equivalents including receivables totaled R$118.7 million.

Outlook and guidance

• Operational leverage is anticipated to become more evident in 2025 as current structures support future growth.

• Store expansion and renovations are set to continue, with a target of 45% of stores under the new concept by year-end.

• Growth strategy prioritizes volume over price increases, aiming for similar trends next year.

• TFSports set to surpass 2,500 events in 2024, with continued focus on user base expansion and monetization.