Chilean retail giant Cencosud saw reported net income rise by 95.2% in the third quarter of 2024, reaching CLP 88.4 billion (€85 million).
This positive performance was primarily driven by favourable exchange rate fluctuations, impacting both debt and operational levels, according to the company.
Private label sales at Cencosud jumped 14% year on year with a penetration rate of 16.2%. Online sales grew 4.9%, while customers subscribing to Cencosud’s Prime programme increased by 55%.
Despite a 1.4% dip in overall revenue, to CLP 3.77 trillion (€3.8 billion) during the period, Cencosud experienced growth when factoring out Argentina's hyperinflation.
Excluding this factor, revenues rose 4.1% and profits climbed 3.4%. The company attributed its improved performance to a rebound in Chilean consumption and a surge in tourism.
Quarterly Highlights
Cencosud achieved a 0.8% increase in adjusted EBITDA and a 20 basis point expansion in EBITDA margin, reaching 9.0%. Excluding Argentina, EBITDA grew by 17.1%, driven by improved profitability in Chile and Peru.
Revenues increased 4.9% in Chile, with the supermarket segment showing a 3.8% increase thanks to online sales and Jumbo Prime programme growth.
In Argentina, the company reduced the gap between inflation and revenue growth (+3.0%) and increased its market share in the supermarket segment by 21 basis points. Peru also saw improved profitability, with revenues (+7.1%) above inflation.
Cencosud also saw a 14.5% year-on-year sales increase in the United States, driven by online sales growth and the weakening Chilean peso.
However, the retailer faced challenges in Brazil, where revenues fell 5.8% due to a decline in consumer spending, increased competition, and new store openings by rivals.
'Refining Our Strategic Plans'
Cencosud's general manager, Rodrigo Larraín, commented, “Despite the economic context we face in the different countries, we remain very enthusiastic and focused on the opportunities we see in the various markets.
“We are refining our strategic plans and initiatives to accelerate our growth and profitability, optimise the use of capital, and generate the capabilities and ecosystem that allow us to continue leading and innovating in the industry, always counting on the loyalty and preference of our customers.”
Cencosud opened five new stores in four countries. Highlights include the launch of a Giga store in Sao Paulo (Brazil) and the opening of The Fresh Market store in Florida (US).
After the close of the quarter, Cencosud opened two additional The Fresh Market stores in Maryland and Illinois during October.
