Petz (PETZ3) Q3 2024 earnings summary

Executive summary

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

• Net income rose 120.1% year-over-year to R$14.9 million, with adjusted net income up 76.5% to R$26.0 million, reflecting margin expansion and positive financial results.

• Gross profit increased 9.4% year-over-year to R$395.2 million, with gross margin at 38.9% (+0.6 p.p. y/y), and adjusted EBITDA grew 14.0% to R$74.6 million (7.3% of gross revenue).

• Opened 5 new stores, reaching 257 total, and expanded digital penetration to 43.8% of gross revenue.

• Maintained net debt close to zero, ending the quarter with net cash of R$48.9 million and leverage at 0.0x adjusted EBITDA.

Financial highlights

• Gross revenue: R$1,016.7 million (+7.6% y/y); digital channel: R$445.5 million (+19.7% y/y); physical channel stable.

• Adjusted EBITDA: R$74.6 million (+14.0% y/y); margin: 7.3% of gross revenue (+0.4 p.p. y/y).

• Net income: R$14.9 million (+120.1% y/y); adjusted net income: R$26.0 million (+76.5% y/y).

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

• Gross profit: R$395.2 million (+9.4% y/y); gross margin: 38.9% (+0.6 p.p. y/y).

Outlook and guidance

• Management expects continued strong performance, driven by customer base growth, low churn, and operational improvements.

• Integration planning for the merger with Cobasi is ongoing, with synergies and organizational alignment as key focus areas.

• Strategic focus on competitiveness, customer loyalty, and omnichannel expansion.