panhia Brasileira de Distribuicao(US:CBD)2023-10-31 17:33Financial Data and Key Metrics Changes - The company reported a 10% growth in gross revenue compared to Q3 2022, with same-store sales increasing by 6.6% [3][17] - Adjusted EBITDA totaled BRL 333 million with a margin of 7%, reflecting a 0.7 percentage point increase from the previous quarter and a 1.2 percentage point increase from Q3 2022 [20][34] - Net profit from discontinued operations showed a loss of BRL 2.1 billion, primarily due to the spin-off of Éxito, while excluding these effects, the net loss would have been BRL 22 million [21][47] Business Line Data and Key Metrics Changes - Pão de Açúcar same-store sales increased by 7.2%, driven by a strong increase in volume, while the Extra Mercado brand saw a 2.5% growth in same-store sales [8][18] - E-commerce sales grew by 15%, totaling BRL 47 million, with both 1P and 3P channels showing double-digit growth [19][37] - The Proximity format reported a 7.7% increase in same-store sales and a 21.7% increase including expansion [44] Market Data and Key Metrics Changes - The company gained 0.6 percentage points in market share according to Nielsen data, indicating successful customer delivery and recognition [34] - The out-of-stock rate reached a historic low of 5.8%, with inventory levels at 94.2% [36] Company Strategy and Development Direction - The company is focused on a turnaround strategy that emphasizes operational and structural improvements, aiming for sustainable results over the next three years [12][112] - Expansion plans include opening more Proximity stores, particularly Minuto Pão de Açúcar, which has shown strong performance [39][72] - The company is committed to improving gross margins through better commercial negotiations and inventory management [54][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue delivering consistent growth despite challenges such as deflation in commodities [67][101] - The company anticipates that operational improvements will continue, particularly in the premium segments, which are less affected by commodity price fluctuations [67][101] Other Important Information - The company has achieved 41% of women in leadership positions, reflecting its commitment to gender equality [13][40] - Significant progress has been made in reducing Scope 1 and 2 gas emissions by 11% as part of its climate change initiatives [14] Q&A Session Summary Question: What are the company's strategies regarding debt equalization? - Management indicated that they are working on reducing structural debt and have started replacing long-term debts with shorter-term debts related to working capital [26][56] Question: What leverage does the company expect in 2023 and 2024? - Management reiterated their commitment to deleveraging and stated that proceeds from asset sales will be directed towards this goal [28][58] Question: How does the company plan to address out-of-stock issues? - The company is focused on improving inventory management and expects to reach best-in-class out-of-stock rates in the future [106] Question: What is the expected impact of the assortment revision process? - The company has completed the first stage of the assortment review for Pão de Açúcar and is working on similar improvements for Proximity brands, expecting to conclude by 2024 [81][93]