VRG (VRG) Q3 2024 earnings summary

Executive summary

• Group revenues in 3Q24 rose 4.8% YoY to PLN 311.5m, with both apparel (+3.0% YoY) and jewellery (+6.2% YoY) segments contributing to growth.

• Group revenues for 9M24 reached PLN 930.5m, up 3.5% YoY, with net profit at PLN 40.6m, down from PLN 51.8m in 9M23.

• Net income surged to PLN 10.1m in 3Q24 from PLN 0.9m in 3Q23, despite a 35.4% YoY drop in EBIT to PLN 12.8m.

• Online sales grew 34.0% YoY in 3Q24, raising the internet's share of group revenues to 12.8%.

• Dividend of PLN 0.09 per share (PLN 21.1m total) to be paid in December 2024.

Financial highlights

• EBITDA in 3Q24 was PLN 45.9m (-11.1% YoY), with EBITDA margin at 14.7% (-2.6pp YoY).

• Consolidated EBITDA for 9M24 was PLN 155.9m, down 3.7% YoY; net profit fell 21.7% YoY.

• Gross margin in apparel improved to 57.4% (+1.3pp YoY); jewellery gross margin slightly decreased to 52.4% (-0.1pp YoY).

• Net cash from operations was negative at PLN -42.8m (vs. PLN 66.4m in 9M23); net debt/EBITDA increased to 1.8x.

• Inventory rose 25.7% YoY, preparing for Q4 sales; cash position at period-end was PLN 11.8m.

Outlook and guidance

• 2024 targets include revenue growth in both segments, higher gross margin in apparel, and stable margin in jewellery.

• 2025 targets: further revenue growth, improved profitability in apparel, and higher operating profit in jewellery.

• Group is prepared for key 4Q24 events (Black Friday, Christmas), with inventory and promotions planned.

• Group may divest Deni Cler Milano brand to focus on core apparel and jewellery brands.

• Planned capex for 2024 is c. PLN 45m, targeting store development and omnichannel initiatives.