Uniao Pet Participacoes (AUAU3) Q3 2024 earnings summary

Executive summary

• Achieved record quarterly gross revenue of R$1.02 billion in 3Q24, up 7.6% year-over-year, driven by digital channel growth of 19.7% and stable physical store sales.

• Net income surged 120.1% year-over-year to R$14.9 million, with adjusted EBITDA up 14.0% to R$74.6 million and margin expansion to 7.3% of gross revenue.

• Digital channel revenue grew 19.7% year-over-year, now representing 43.8% of gross revenue, with 92% of digital orders delivered within one business day.

• Accessories category returned to growth (+15.4% year-over-year) after four quarters of decline, supported by portfolio expansion and private label penetration.

• Opened 5 new stores, totaling 257 stores nationwide, with 54% of stores yet to reach maturity.

Financial highlights

• Gross profit reached R$395.2 million in 3Q24 (+9.4% year-over-year), with a gross margin of 38.9% (+0.6 p.p. year-over-year).

• Adjusted EBITDA was R$74.6 million (+14.0% year-over-year), with margin improvement to 7.3% of gross revenue (+0.4 p.p. year-over-year).

• Net income for the quarter was R$14.9 million (+120.1% year-over-year), with a net margin of 1.5% (+0.7 p.p. year-over-year).

• Free cash flow was R$145.8 million in 3Q24, compared to a negative R$35.0 million in 3Q23.

• Digital gross revenue rose to R$445.5 million (+19.7% year-over-year), with digital penetration at 43.8%.

Outlook and guidance

• Management expects continued robust performance, supported by operational improvements, cost optimization, and digital expansion.

• Integration planning for the Cobasi merger is ongoing, with completion pending regulatory approval.

• Strategic focus on competitiveness, customer loyalty, omnichannel expansion, and leveraging technology for customer experience.