Vivara Participações (VIVA3) Q2 2024 earnings summary

Executive summary

• Gross revenue grew 19.2% year-over-year to R$836.6 million, driven by improved inventory allocation, strong seasonal event performance, and robust growth in Jewelry (+18.0%) and Life (+20.6%) categories.

• Net income surged 91.8% year-over-year to R$211.0 million, with net margin expanding to 32.1%.

• Adjusted EBITDA rose 23.9% to R$164.1 million, with margin up 135 bps to 25.0%.

• Operational cash generation increased fivefold compared to 2Q23, reaching R$111.5 million.

• Interim financial statements for the quarter ended June 30, 2024, reviewed by KPMG, found to be in accordance with CPC 21 (R1) and IAS 34, with no material misstatements.

Financial highlights

• Net revenue was R$656.3 million in 2Q24, up 17.2% from 2Q23.

• Gross profit reached R$451.8 million (+15.8% vs 2Q23), with gross margin at 68.8%.

• SSS (physical stores + digital) grew 11.6% year-over-year; physical stores SSS up 12.9%.

• Digital sales gross revenue up 5.2% to R$110.1 million; organic digital sales growth at 24.1%.

• CAPEX was R$38.2 million, down 19.2% year-over-year, representing 5.8% of net revenues.

Outlook and guidance

• Management is optimistic for 2H24, expecting continued growth, profitability expansion, and strong cash generation.

• Plans to open 70–80 stores in 2024, including the first international store in Panama in Q4 2024.

• Focus on improved store supply, product assortment, inventory allocation, and operational efficiencies.

• Launch of new store layouts to boost customer circulation and sales agility.

• Market share in Brazil's jewelry market reached 20.6% at quarter-end.