Éxito 2Q 2020 Net Income Vastly Improves Year-on-Year, Defying Covid Crisis
Medellin-based multinational supermarket giant Grupo Exito announced July 27 that its second quarter (2Q) 2020 consolidated net income hit COP$12.8 billion (US$3.5 million) — a complete reversal from the COP$18 billion (US$4.9 million) net loss in 2Q 2019.
Sales also rose 7% year-on-year (excluding currency change effects), to COP$3.56 trillion (US$968 million), while recurring earnings before interest, taxes, depreciation and amortization (EBITDA) rose 10% year-on-year, to COP$299 billion (US$81 million).
The good results “reflect a positive variation in operational results in Colombia and Uruguay and a lower level of financial expenses,” according to Exito.
“Sales of direct and electronic commerce channels grew 191% in Colombia and 116% in Uruguay, responding appropriately to changes in customer consumption habits, due to Covid-19,” according to the company.
“In Colombia, the performance of ‘Éxito Wow’ [large-format stores] and ‘Carulla FreshMarket’ stood out, with food sales growing in double digits,” the company added.
Colombia operations registered 2Q 2020 sales of more than CO$2.7 trillion (US$734 million), up 4.7% year-on-year, taking a 77% share of the group’s total sales.
In Uruguay, sales grew 13.3% in local currency, “driven by the results of the Devoto and Disco brands, and a solid increase in sales of 116% from e-commerce and direct channels,” according to Exito.
In Argentina, sales grew 23% in local currency. At the end of the quarter, Exito implemented a sales model whereby customers could order goods in advance and then pick them up later, “capitalizing on the experiences of the other business units of the Group” that are adapting to restrictions on customer movements during the Covid-19 crisis.
Throughout its operations, “e-commerce and direct channels have responded to the great need of customers for the health emergency and accounted for 14.7% of the company’s total sales during the second quarter of 2020, compared to 5.2% in the first quarter of the year,” according to Exito.
The company recorded a 263% increase in sales from e-commerce channels (exito.com and carulla.com) and more than 40 million internet site visits. In addition, home deliveries jumped by 127% with 2.6 million orders in the latest quarter.
“Adoption of mobile applications — with more than 3 million downloads and more than 87,000 orders in this period — rose 480% over the second quarter of 2019,” according to Exito.
“Expansion and strengthening of the purchase-and-collection service in 450 stores in Colombia, with more than 59,000 orders, meant growth of 194.7% compared to the second quarter of the previous year.
“Launch of the virtual platform of the ‘Viva’ shopping centers, with purchase and pick-up service, represented 7.8% of total tenant sales in the second quarter of the year.
“These positive results in the retail business are a consequence of the company’s ability to adapt and transform in the midst of the health emergency . . . [which] managed to offset the performance of other complementary businesses such as Viajes Éxito and real estate that faced challenging situations during the quarter” because of the Covid-19 lockdowns.
Meanwhile, on the Colombian charity front, Grupo Éxito donated 700,000 Covid-19 face masks to 42 municipalities and to the national government, worth COP$1.4 billion (US$380,000).
As for Exito’s continuing programs providing child nutrition to the poor, “especially in the midst of the pandemic, Fundación Éxito has delivered more than 146,000 food packages to Colombian children and families since the beginning of the emergency,” the company added.