C&A Modas (CEAB3) Q3 2024 earnings summary

Executive summary

• Achieved robust growth in all financial and operational metrics, with net revenue up 16.7% year-over-year to R$1.8 billion and same-store apparel sales up 18.9%.

• Apparel segment led growth, with 13th consecutive quarter of gross margin expansion, reaching a record 55.1% for Q3.

• Adjusted EBITDA margin expanded by 4.4 percentage points to 17.6%, and adjusted net profit reversed from a loss last year to R$52 million.

• Leverage ratio improved to 1.0x from 2.9x, reflecting strong cash generation and financial discipline.

• Strong customer engagement, with a 120% increase in monthly active app users and a 5-point rise in NPS, supported by brand repositioning and omni-channel initiatives.

Financial highlights

• Net revenue grew 16.7% year-over-year to R$1.8 billion, with same-store apparel sales up 18.9%.

• Consolidated gross margin reached 54.4%, the highest for a third quarter, with apparel gross margin at 55.1%.

• Adjusted EBITDA increased 55.2% year-over-year to R$316 million, with margin at 17.6%.

• Adjusted net income was R$52 million, a sharp reversal from last year.

• CAPEX rose 73.5% year-over-year, focused on digital, technology, and store remodeling.

Outlook and guidance

• Confident in continued solid results, with further gross margin and EBITDA margin expansion expected.

• Continued focus on omni-channel growth, store remodeling, and digital expansion, with new store concepts launching in 2025.

• Ongoing investments in store renovations and new formats planned for 2025.

• Anticipates further value creation through increased sales per square meter and operational efficiency.

• Strategic focus on product relevance, omni-channel integration, and CRM through 2026.