Falabella (FALABELLA) Q3 2024 earnings summary

Executive summary

• Achieved strong operational and financial performance in Q3 2024, with all five business lines improving results and a focus on customer experience, omnichannel strategy, and profitability driving outcomes.

• Consolidated revenues rose 5.8% year-over-year to $3,169 million, with net income of $97 million and EBITDA margin of 11.6%, the highest since 2021.

• E-commerce strategy delivered robust growth, with online GMV up 15% to $674 million, and over 40% of sales now through digital channels.

• Banking operations saw improved risk metrics and portfolio growth in Chile, with consolidated NPL at 3.6% and the lowest vacancy rates in Plaza in five years.

• Selective physical expansion continued, including new IKEA and Sodimac stores, and Mallplaza's capital increase was completed.

Financial highlights

• Total revenue rose 6% year-over-year to $3,169 million, with gross profit up 20% to $1,186 million and gross margin improving to 37.4%.

• EBITDA surged 82% year-over-year to $368 million, with an EBITDA margin of 11.6%.

• Net profit reached $97 million, a significant turnaround from a $5 million loss in Q3 2023.

• SG&A over revenue ratio improved to 29.8% from 30.7% a year ago, reflecting operational efficiency.

• Net financial debt (excluding banking) fell 17% year-over-year to $3,332 million, and the net leverage ratio for non-banking businesses dropped to 3.7x.

Outlook and guidance

• Entering a new phase focused on sustainable and selective growth, leveraging brand strength, omnichannel capabilities, and digital banking.

• S&P revised outlook from Negative to Stable, maintaining a BB+ rating due to improved operating performance.

• Expect continued portfolio expansion in banking, especially in Chile, with risk metrics in line with historical levels.

• Anticipate further improvement in margins and sales, with positive trends in Peru and Chile expected to continue into Q4.

• Investment plans for 2025 to focus on growth in Sodimac Mexico, Tottus and Sodimac in Peru, and digital capabilities, with a regional focus on the Pacific area.