- Consolidated Revenue: 52 billion, increased 9.8% year on year.
- Retail Revenue: Increased 9.5% year on year.
- Financial Services Revenue: Increased 18.4% year on year.
- Normalized Real Estate Revenue: Increased 12.7% year on year.
- Same-Store Sales (Liverpool): Grew 6.5%.
- Gross Margin: 33%, an increase of 100 basis points year on year.
- Inventory Position: Grew 8.4% year on year.
- Net Credit Portfolio: Increased 18.7% year on year.
- Liverpool Cardholders: Increased 8.4% to over 7.5 million.
- Suburbia Cardholders: Increased 16% to 1.7 million.
- Gross Margin (Consolidated): 40.6%, an increase of 1.1 percentage points year on year.
- Operating Expenses: Grew 18% year on year.
- Consolidated Operating Income: 6.2 billion, increased 32.2% year on year.
- NPL Ratio: 3.5%, an increase of 54 basis points year on year.
- Bad Debt Provision: 1 billion, increased 18.4% year on year.
- EBITDA: 9.3 billion, increased 6.7% year on year.
- EBITDA Margin: 17.8%, a decrease of 52 basis points year on year.
- Net Profit: 6.2 billion, increased 32.2% year on year.
- Digital Channel GMV: Increased 19.4% year on year.
- Marketplace GMV: Increased 58% year on year.
- CapEx: 2.2 billion for the quarter, cumulative investment of 5.1 billion.
- Cash Flow from Operations: Positive 4.7 billion.
- Cash on Hand: 22 billion.
- Net Debt to EBITDA Ratio: Close to zero.
- Dividends: 4 billion approved, with installments paid in May and October.
- New Stores: One new Suburbia store and six new Liverpool Express units opened.
Release Date: July 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Retail revenue increased by almost two digits, showing solid year-on-year improvements.
- Credit portfolio continues to deliver significant growth with NPLs still below pre-pandemic levels.
- Normalized real estate revenue was strong, with a 12.7% increase year-on-year.
- Consolidated gross margin improved by 1.1 percentage points due to better retail margins and favorable business segment mix.
- Digital channel GMV grew by 19.4% year-on-year, with Marketplace GMV increasing by 58%.
Negative Points
- Operating expenses without bad debt provisions and depreciation grew by 18% year-on-year.
- NPL ratio increased to 3.5%, a rise of 54 basis points from the previous year.
- EBITDA margin contracted by 22 basis points due to higher operating expenses.
- Electronics and children's apparel categories underperformed compared to other segments.
- Sales are coming in slightly below expectations, despite strong margins.
Q & A Highlights
Q: What is your outlook for the consumption environment in the second half of the year, and how are you planning inventories and promotions?
A: We have seen a slight decrease in consumption, with sales coming in below expectations. However, margins have been strong, balancing out the overall performance. We expect this trend to continue in the second half of the year. (Gonzalo Gallegos, CFO)
Q: Can you elaborate on the performance of different product categories, particularly electronics?
A: Cosmetics, beauty, and sports apparel performed strongly, while children's apparel was below expectations. Electronics sales are influenced by sports events, and we are taking actions regarding inventory, pricing, and promotions to improve performance in the second half. (Gonzalo Gallegos, CFO)
Q: How are your e-commerce initiatives performing against internal expectations?
A: We are pleased with the results of our major sales events, such as Mother's Day and Father's Day. We have made adjustments to offer consistent discounts online and offline, which has positively impacted sales and margins. (Gonzalo Gallegos, CFO)
Q: What is the outlook for the financial part of the business, particularly regarding NPLs?
A: NPLs have increased to 3.5%, above our expectations. We are closely monitoring this and expect NPLs to be around 3.3% by year-end. The increase is partly due to the overall growth in credit cards in the market. (Gonzalo Gallegos, CFO)
Q: Are you losing market share in the electronics category to online competitors?
A: We do not believe we are losing significant market share in the electronics category. The overall market dynamics apply to us as well, and we are taking steps to maintain our position. (Gonzalo Gallegos, CFO)
Q: How are you managing consumer indebtedness and loan loss provisions?
A: We have increased our loan loss provisions and are implementing refinancing plans for high-debt customers. We are closely monitoring the health of our credit portfolio and making necessary adjustments. (Gonzalo Gallegos, CFO)
Q: Are you becoming more cautious in credit approvals due to increased NPLs?
A: Not at the moment. We are taking some actions like refinancing plans for high-risk customers but are not making significant changes to our credit approval process. (Gonzalo Gallegos, CFO)
Q: How did your digital channel perform in the second quarter?
A: GMV grew 19.4% year-on-year. We made changes to offer consistent promotions across digital and physical channels, which resulted in a more consistent shopping experience and positive overall results. (Gonzalo Gallegos, CFO)
Q: What are your plans for new store openings and investments?
A: We opened one new Suburbia store and six new Liverpool Express units. CapEx during the quarter was 2.2 billion, with significant investments in real estate, new stores, and remodeling projects. (Gonzalo Gallegos, CFO)
Q: Can you provide an update on your credit ratings?
A: Fitch Ratings and Standard & Poor's ratified our credit ratings, with a triple B plus rating from Fitch and a triple B rating from S&P on a global scale. Both agencies also affirmed a triple-A rating on a national scale with a stable outlook. (Gonzalo Gallegos, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
