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Grupo Exito Store Expansions Continue Grupo Exito Store Expansions Continue Source: Grupo Exito

Éxito 3Q 2022 Net Income Drops 60% Year-on-Year

Published in Companies Written by  November 05 2022 font size decrease font size increase font size 0
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Medellin-based multinational supermarket and dry-goods retailer Grupo Éxito announced November 3 that its third quarter (3Q) 2022 net income fell 60.5% year-on-year, to COP$49.9 billion (US$9.9 million), from COP$126 billion (US$25 million) in 3Q 2021.

The profits decline came from higher financing costs -- including stiffer loan provisions and higher interest rates – along with a steep inflationary adjustments in Argentina and tax-basis changes in Colombia, according to the company.

Despite the decline in net income, recurring earnings before interest, taxes, depreciation and amortization (EBITDA) actually improved by 12.9% year-on-year, to COP$399 billion (US$79 million), while net revenues also rose 22.6% year-on-year, to COP$5.1 trillion (US$1.01 billion), according to the company.

The revenue boost mainly came from a 23% hike in retail sales “driven by solid performance of innovative formats, omnichannel growth (24.4%) and commercial dynamism in all countries,” according to Éxito, with further revenue gains in its real-estate division (up 35% year-on-year,” according to the company.

Capital investment rose 74% year-on-year, mainly in retail and real-estate expansions, according to Éxito.

“Innovative formats reached a 39% share on Colombia sales (+340 basis points vs 2Q 2022); the Fresh Market model represented 53.1% of Carulla segment in Colombia, 51.5% in Uruguay and 29% in Argentina,” according to Éxito.

“Amidst a challenging inflationary environment, advance purchasing was done to hedge costs and our food portfolio [costs] registered 5.7 percentual points below food inflation,” stated Grupo Éxito CEO Carlos Mario Giraldo.

“Prices of apparel also remained competitive as 94% was locally sourced to protect against the impact of devaluation. Our efforts in strengthening innovation, digital platforms, and complementary businesses also contributed to the company’s solid performance,” he added.

During 3Q 2022, Éxito opened six more large-format “Éxito Wow” stores and converted four other stores into “Carulla Fresh Market” upscale formats.

“In the last-12 months, Grupo Éxito totaled 85 store changes from openings, reforms, and conversions (75 in Colombia, five in Uruguay and five in Argentina). The company reached 602 food retail stores, geographically diversified as follows: 483 stores in Colombia, 90 in Uruguay and 29 in Argentina, and consolidated selling area reached 1.04 million square meters,” the company added.

As for its Uruguay operations, “recurring EBITDA grew 32.3%, to a 10% margin . . . driven by cost control and operational efficiencies. The operation in Uruguay continued as the most profitable business unit of the group,” according to Éxito.

As for its Argentina operations, “net revenue increased by 131.8% in 3Q 2022 in local currency terms. Quarterly performance benefited by retail dynamism, increased traffic, omni-channel performance and a higher contribution of the real-estate business,” according to Éxito .

“Recurring EBITDA margin [in Argentina] gained 236 basis points to 5.1% in 3Q 2022 as a percentage of net revenue, benefited by expense dilution and operating efficiencies despite inflationary pressures,” the company added.

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