SMU (SMU) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue declined 0.7% year-over-year to CLP 706,710 million, mainly due to calendar effects, high comparison base, and lower same-store sales, partially offset by new store performance.

• EBITDA dropped 19.3% year-over-year to CLP 54,192 million, with margin falling to 7.7% due to higher operating expenses and flat top-line growth.

• Net income declined 78% year-over-year to CLP 4,210 million, mainly due to lower operating results and a non-recurring restructuring cost.

• Private label penetration in Chile reached 13% of sales, with ongoing efforts to replicate this in Peru, supporting profitability and competitiveness.

• A five-year investment plan of USD 600 million (2025-2029) was announced, targeting 115 new stores, remodels, and efficiency, funded by operating cash flow.

Financial highlights

• Gross profit increased 0.4% year-over-year to CLP 224,738 million, with gross margin expanding by 30-33 bps to 31.8%.

• Operating expenses rose 8.8% year-over-year, driven by higher minimum wage, inflation, and personnel costs.

• Cash and cash equivalents at March 31, 2025, were CLP 170,618 million, with no major debt maturities until 2027.

• Dividend of CLP 2.02487 per share paid on May 7, 2025, representing 75% of 2024 net income.

• EBITDA margin (LTM) was 7.60%; ROA: 1.36%; ROE: 4.15%.

Outlook and guidance

• Sales growth observed in April and early May, with expectations for improved top-line and gross margin in Q2 and Q3 due to easier comps.

• Gross margin expected to remain stable or improve slightly for the rest of 2025, supported by promotional activity and private label growth.

• The five-year investment plan targets expansion, efficiency, and maintenance, with no increase in debt anticipated.

• No significant store closures planned; ongoing review of store performance.

• EBITDA margin targeted to recover to 8.5% in 2025 and reach 9% in 2026.