• Gross Sales: BRL32.8 billion in Q4 2024, up 5.5% year-over-year.
• Gross Margin: 19.3%, down 70 basis points from Q3 2023.
• Adjusted EBITDA: BRL1.9 billion with a 6.5% margin.
• Adjusted Net Income: BRL1.8 billion, driven by BRL1 billion in deferred tax assets.
• Atacadao Sales Growth: 9.6% year-over-year in Q4 2024, with a 6.3% like-for-like increase.
• Retail Like-for-Like Sales Growth: 5.9% year-over-year in Q4 2024.
• Sam's Club Revenue Growth: 14% year-over-year in Q4 2024.
• Banco Carrefour Billing Growth: 16% year-over-year.
• Store Expansion: 5 new Atacadao stores in Q4 2024, totaling 19 new stores for the year.
• Cash & Carry Segment Sales: BRL23.3 billion in Q4 2024, up 9.6% year-over-year.
• SG&A Reduction: 1.8% below inflation, reducing 50 basis points as a percentage of net sales.
• Full Year Sales: BRL120.6 billion, up 4.4% from 2023.
• Full Year EBITDA: BRL5.9 billion, up 13.4% year-over-year.
• Free Cash Flow: BRL3.2 billion for the full year.
• Net Debt: BRL10.1 billion, with a leverage ratio of 1.56x net debt-to-EBITDA.

• Warning! GuruFocus has detected 7 Warning Signs with ATAAY.

Release Date: February 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Atacadao SA (ATAAY) achieved strong sales growth with a 9.6% year-over-year increase, outperforming the market average.
• The company successfully opened 19 new Atacadao stores in 2024, contributing to its expansion strategy.
• Digital sales saw significant growth, with GMV reaching BRL3.4 billion, up 19% year-over-year.
• Sam's Club revenue grew by 14% year-over-year, indicating successful investment and format expansion.
• Atacadao SA (ATAAY) made notable progress in ESG initiatives, reducing Scope 1 and Scope 2 emissions by 47% compared to the 2019 baseline.

Negative Points

• Consolidated EBITDA margin declined slightly to 6.5%, impacted by Banco Carrefour's performance under new credit card interest caps.
• Gross margin decreased by 70 basis points due to the larger share held by Atacadao, which has narrower margins.
• The company faced challenges with manpower shortages, impacting operations in certain regions.
• Retail segment experienced an 8% decrease in revenue due to store closures and conversions.
• Banco Carrefour's financial margin dropped by 7 percentage points due to new interest cap regulations.

Q & A Highlights

Q: Could you elaborate on the dynamics in Cash & Carry, particularly regarding the new store openings and their impact on traffic and gross margins? A: Stephane Maquaire, CEO, explained that the gross margin at Atacadao is influenced by B2B and B2C dynamics and market conditions. The introduction of new services like self-checkouts and bakery services in over 160 stores has increased traffic. Despite narrower margins in B2B sales, successful campaigns like Black Friday and Dia de Parcero boosted sales. The pricing strategy remains competitive, focusing on maintaining price leadership.

Q: How are you managing inflation and pricing strategy in Atacadao compared to competitors? A: Stephane Maquaire, CEO, stated that they try to hold prices steady and delay passing on inflation to consumers. In Cash & Carry, they can buy in anticipation of inflation, allowing them to maintain competitive pricing. In retail, they have repositioned pricing in hypermarkets and continue to monitor inflation trends, aiming to offer some relief to consumers despite high food inflation.

Q: Are you experiencing any challenges with hiring personnel, and how is this affecting your operations? A: Stephane Maquaire, CEO, acknowledged a manpower shortage, particularly during vacation periods, affecting hiring in various regions. They expect the situation to improve post-Carnival. Eric Alencar, CFO, added that the impact on gross margin from payables remains steady, with no structural changes expected.

Q: What are your expansion plans for 2025, considering the current economic environment? A: Stephane Maquaire, CEO, mentioned a focus on deleveraging and securing cash flow due to high interest rates. They plan fewer store openings in 2025 for both Atacadao and Sam's Club formats, aligning with industry trends. The company aims to maintain a cautious approach to expansion.

Q: How is the potential delisting by Carrefour France affecting your strategy and capital allocation? A: Stephane Maquaire, CEO, indicated that the delisting is not expected to significantly change their strategy. The focus remains on long-term growth, with potential for more agility in expansion plans. The high interest rate environment will continue to influence their cautious approach to capital allocation.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.