Casas Bahia’s loss drops 12.2% in 1QR24- Capitalist

Casas Bahia (BHIA3) recorded a reduction in net loss to R$261 million in the first quarter of 2024, a figure 12.2% lower compared to the same period of the previous year. This improvement in the last line of the balance sheet, even more significant compared to the last quarter of 2023, when a loss of R$ 1 billion was recorded, is partly attributed to an improvement in the financial result, which, although still negative, went from R$ $827 million to R$486 million.

Although net revenue still showed a decline of 13.7% compared to the previous year, totaling R$6.3 billion, the company also recorded a 7.5% reduction in sales, general and administrative (SG&A) expenses. , with personnel expenses decreasing by 14.6% compared to the same period in 2023.

The company’s strategy of getting rid of unprofitable product categories and focusing on profitable segments, such as household appliances, cell phones and televisions, contributed to this improvement, according to its executives, for whom there was also a reduction in expenses after the closure of 57 stores and readjustment of five distribution centers.

Casas Bahia (BHIA3)

The retail group’s gross margin fell 1.5 percentage points compared to the previous year, but represents an improvement compared to the last quarter of 2023, now standing at historical levels for the company.

Although the operating result, measured by adjusted Ebitda, fell 42.6% compared to the previous year, to R$387 million, there was a significant improvement compared to the last quarter of 2023. Franklin emphasized that the expectation is for a gradual improvement and reiterated the company’s commitment to profitability.

As for the extrajudicial recovery plan, which seeks to fully reprofile debts of R$4.1 billion, the company recorded a negative free cash flow of R$176 million in the first quarter, the best result for the period in the last five years , which was seen by analysts as a relief for Casas Bahia’s cash flow and an opportunity for the company to focus on its transformation plan. This plan includes sustainable cost reduction, maintaining efficient operations and select investments to strengthen the core and increase revenue.

The company

Casas Bahia is one of the largest retail chains in Brazil, specializing in the sale of a wide variety of products, from household appliances and electronics to furniture and home utensils. Founded in 1952, the company began as a small store in São Caetano do Sul, São Paulo, and over the decades expanded its presence throughout the country.

One of Casas Bahia’s striking features is its installment sales model, which allows customers to purchase products by paying in affordable installments. This facilitated credit model contributed significantly to the inclusion of millions of Brazilians in the consumer market.