SMU (SMU) Q4 2024 earnings summary

Executive summary

• Opened 20 new stores in 2024, progressing toward a 3-year target of 58 new stores by 2025, with new locations outperforming sales and EBITDA expectations.

• E-commerce sales grew 21% in 2024, with online penetration rising to 4% and expanded omnichannel and click & collect services.

• Loyalty programs and private label expansion drove customer engagement, with private label sales reaching 13% and over 180 new products launched.

• Achieved top industry sustainability rankings in Chile and Latin America, including Dow Jones and S&P Global recognitions.

• Net income declined 44.1% year-over-year, impacted by higher costs and absence of prior year’s non-recurring gain.

Financial highlights

• Full-year revenue reached CLP 2,887 billion, up 0.9% year-over-year, led by Unimarc's 1.6% growth.

• Gross margin improved by 70 bps in Q4 2024 to 31.5%, after two quarters of decline.

• EBITDA margin for 2024 was 8.0%, down from 9.2% in 2023, reflecting higher operating expenses and inflation.

• Net income for 2024 was CLP 48,750 million, down 44.1% year-over-year; Q4 net income fell 56.8%.

• Operating expenses rose 6.2% for the year, mainly due to higher wages and electricity rates.

Outlook and guidance

• Plan to open 24 new stores in 2025 (16 in Chile, 8 in Peru), completing the 3-year expansion plan.

• CapEx for 2025 projected at CLP 120 billion, similar to 2024, focusing on omnichannel growth, store openings, remodels, and efficiency.

• Ongoing focus on efficiency, productivity, and mitigating inflation and wage pressures through restructuring.

• Energy efficiency projects to expand renewable energy coverage to over 50% by 2027.

• Management targets a long-term EBITDA margin of 9%.