Release
4Q24
Conference Call
Date:
February 26, 2025
Time:
10:00 a.m. (Brasília) 8:00 a.m. (New York)
CEO:
Alexandre Afrange
IRO:
Elisa Bastos de Lima
IR Coordinator:
Nicolas Costa
Investor Relations:
ri@veste.com
Click here to access
DUDALINA
São Paulo, Brazil, February 25, 2025. Veste S.A. Estilo ("Company"; B3:VSTE3), a company acting in the high-end clothes and accessories segment in Brazil, hereby submits its results for the fourth quarter of 2024 (4Q24), pursuant to the International Financial Report Standards (IFRS).
W W W.V E S T E . C O M
LE LIS
Message from Management
Dear Shareholders,
When we released our 2023 results, we indicated the strategies we would pursue for Veste's brands from then on and we reached the end of 2024 having fulfilled each of these plans. They were implemented over time and began to generate concrete results in the fourth quarter, reinforcing our confidence in the path we are taking.
In the fourth quarter of 2024, gross revenue amounted to BRL 392.9 million, an increase of 9.7% compared to the same period last year. The channels and brands that were already on a positive trajectory, especially Le Lis and Dudalina's retail operation, maintained this pace. And with 26.7% growth in B2B and a 4.0% increase in same store sales at John John, we made significant progress on the main points that made the year more challenging.
Adjusted gross profit for the quarter was BRL199.0 million, up 4.9% on 4Q23, with an adjusted gross margin of 63.6%, down 3.7p.p. on 4Q23. The reduction in gross margin is explained by a rise in sales on Black Friday and by the mix of channels, since the B2B channel showed greater growth. The company's focus remains on full-price sales, which maintained their share of sales at 88%, the same level as in 4Q23. Adjusted EBITDA for the quarter was BRL 69.2 million, +12.8% compared to 4Q23. As a result, we recorded adjusted net income of BRL 13.1 million in the period.
Gross revenue for the year was BRL 1.4 billion and grew 2.1% compared to the previous year. Adjusted gross profit was BRL 715.9 million, -1.8% compared to 2023, with an adjusted gross margin of 63.6%, 2.1p.p. lower than the previous year. In addition to the factors that affected the gross margin in the fourth quarter, there was also the effect of lower margins on the John John brand throughout the year, a temporary factor linked to its repositioning. Even with more moderate growth, we ensured the stability of adjusted EBITDA at BRL 224.9 million and an adjusted EBITDA margin of 20.0%, due to very strict management of expenses. This reinforces our financial discipline and ability to adapt to market challenges. Adjusted net income for the year to date was BRL 14.2 million.
In addition to executing our brands' strategic plans, we prioritized cash generation in 2024. With the operation optimized, we reduced inventories by BRL 47.3 million compared to the end of 2023, equivalent to a 60-day decrease in inventory levels. With higher cash generation, we were able to reduce the balance of receivables advances by BRL 66.9 million, including the assignment of receivables from B2B clients and advances made with credit card acquirers. This movement led to an increase in accounts receivable, without extending the payment terms granted to clients. Adjusting for the effect of the reduction in receivables advances on the accounts receivable line, free cash flow, ex-IFRS 16, meaning after lease payments, amounted to BRL 95.7 million.
Consolidated same store sales for the year grew by 4.4%. It is worth highlighting 4Q24 when this indicator accelerated to 8.0% compared to 4Q23. The positive indicator across all brands directly reflects the strength of our strategy and the improved sales dynamics in the period.
Le Lis, our main brand, continues to grow, strengthening its position in the market. Turnover grew by 11.6% in the quarter and 7.8% in the year and the active customer base grew by 3.7%, confirming the brand's attractiveness. Throughout 2024, the brand has achieved the four pillars of its strategy:
- continued conversion of stores to its new concepts, (ii) investment in the digital channel, which recorded double-digit growth in the quarter and the year, (iii) acceleration of the B2B channel, that grew more than 50% in the fourth quarter, driven by innovations in the calendar and go-to-market strategy and (iv) continuous pursuit of service excellence , which resulted in an NPS of 83 for the brand. In addition to these pillars, in 2025 there will be a greater emphasis on growing the active
RELE ASE l 4Q24 4
customer base and Veste will focus on innovation in the brand. We are 100% focused on the long- term growth of Le Lis.
To ensure the company's expansion, we will continue to invest heavily in Le Lis, as well as in Dudalina, which has established itself as Veste's second largest brand and in which we see enormous potential. The brand's performance was positive, with growth of 4.8% in the year and 12.6% in the quarter. The growth levers announced for 2024 were met and will continue in 2025. We brought the new concept to five more stores, with a total of 16 stores, which are growing more than the non-refurbished operations. In wholesale, the adjustments that have been made since 2023 led to growth of more than 20% in the fourth quarter. In the franchise plan, we will open three new franchises at the end of 2024 and three more in February 2025, so we will have ten franchised stores. We remain committed to reaching 30 franchises by the end of 2026.
When we announced our 2023 results, we mentioned that we were confident that the adjustments being made at John John would lead to a reversal of trajectory towards the end of 2024. And, in fact, we see the brand beginning to stabilize as of the fourth quarter. The increase in same store sales was 4.0% in the period, driven by the digital channel. According to our plan, 2025 will still be a year of stability, building the basis for growth in the coming years.
An important advance, which is part of the strategy of all the brands, was the consolidation of the omnichannel operation. We are increasingly integrated, offering a fluid and consistent experience for our customers, in physical stores, digitally and wholesale. Digital B2C grew 18.7% in the quarter and 13.1% in the year and digital sales, which encompass the omnichannel tools, grew 32.0% and 29.5% in the quarter and year, respectively.
Looking ahead, we have a clear path. We are focused on increasing the customer base, growing the wholesale and franchise channels, providing a memorable experience for our customers and operational efficiency. Internal digital transformation will be an essential pillar for increasing this efficiency and further improving inventory management, results and cash generation.
We have a promising horizon, with clarity about what needs to be done and determination to deliver profitable and sustainable results. None of this would be possible without the dedication of the Veste team. Our culture is our strength and it is our people who make the difference every day.
We would like to thank employees, partners and investors for their trust.
The Management
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BO.BÔHighlights
Highlights
Financial
- Gross revenue of BRL 392.9 million in the quarter, +9.7% compared to 4Q23. In 2024, BRL 1.4 billion, +2.1% compared to 2023
- Adjusted gross profit of BRL 199.0 million, +4.9% compared to 4Q23. In 2024, BRL 715.9 million, -1.8% compared to 2023
- Adjusted gross margin of 63.6%, down 3.7 p.p. compared to 4Q23 and in 2024, 63.6%, down 2.1 p.p. compared to 2023
- Adjusted EBITDA of BRL 69.2 million, +12.8% compared to 4Q23. Year to date, BRL 224.9 million, 0.2% compared to 2023
- Adjusted EBITDA margin of 22.1% in the quarter, +0.4p.p. compared to adjusted 4Q23. In 2024, 20.0%, stable compared to 2023 (-0.2p.p.)
- Adjusted net profit of BRL 13.1 million in the quarter and adjusted net margin of 4.2%. In 2024, adjusted net profit of BRL 14.2 million and adjusted net margin of 1.3%
Operational
- Consolidated Same Store Sales of 8.0% compared to 4Q23, fifteenth consecutive quarter of increase in the indicator
- Share of full-price sales in the B2C channel, considering stores and websites, of 88% in the quarter
- The Dudalina, John John and Individual apps accounted for 24.5% of these brands' B2C Digital sales in the quarter
- B2B Channel revenue of BRL 58.2 million, +26.7% compared to 4Q23, confirming the channel's recovery process
- Opening of three Dudalina franchises, marking the start of the brand's expansion project
- Inventory reduction (-16.0% vs. 4Q23) with a high sell-through rate of collections. 60-day reduction in inventory days during this period.
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JOHN JOHN
Main Indicators
Income Statement
Income Statement | 4Q23 | 4Q24 | Var. % | 2023 | 2024 | Var. % |
R$ in thousands | ||||||
Gross revenue | 358,043 | 392,904 | 9.7% | 1,377,560 | 1,406,607 | 2.1% |
Adjusted net revenue | 281,848 | 312,714 | 11.0% | 1.109,824 | 1,125,462 | 1.4% |
Adjusted gross profit | 189,681 | 199,013 | 4.9% | 728,838 | 715,894 | -1.8% |
Adjusted gross margin % | 67.3% | 63.6% | -3.7p.p. | 65.7% | 63.6% | -2.1p.p. |
Adjusted EBITDA | 61,366 | 69,243 | 12.8% | 224,407 | 224,876 | 0.2% |
Adjusted EBITDA margin % | 21.8% | 22.1% | 0.4p.p. | 20.2% | 20.0% | -0.2p.p. |
Adjusted net income | 19,608 | 13,122 | -33.1% | 55,934 | 14,181 | -74.6% |
Adjusted net margin % | 7.0% | 4.2% | -2.8p.p. | 5.0% | 1.3% | -3.8p.p. |
* Detail of adjustments in the "Period Adjustments" section on page 22
Gross Revenue, Breakdown per Channels and Brands
Gross Revenue | 4Q23 | 4Q24 | Var. % | 2023 | 2024 | Var. % |
R$ in millions | ||||||
Sales Channel | 358.0 | 392.9 | 9.7% | 1,377.6 | 1,406.6 | 2.1% |
Per Channel | ||||||
B2C | 284.5 | 302.0 | 6.2% | 1,028.0 | 1,058.9 | 3.0% |
Physical Stores | 235.1 | 243.4 | 3.5% | 822.7 | 826.7 | 0.5% |
Digital | 49.3 | 58.6 | 18.7% | 205.4 | 232.2 | 13.1% |
B2B | 45.9 | 58.2 | 26.7% | 260.3 | 238.7 | -8.3% |
Outlets | 27.7 | 32.7 | 18.2% | 89.2 | 109.0 | 22.1% |
Outlet Stores | 23.4 | 28.2 | 20.5% | 73.7 | 83.5 | 13.4% |
Estoque Website | 4.3 | 4.5 | 5.4% | 15.6 | 25.4 | 63.4% |
Per Brand | ||||||
Le Lis | 180.1 | 201.1 | 11.6% | 653.2 | 704.4 | 7.8% |
Dudalina | 56.3 | 63.4 | 12.6% | 223.8 | 234.6 | 4.8% |
John John | 53.1 | 49.5 | -6.9% | 224.8 | 177.4 | -21.1% |
BO.BÔ | 29.4 | 29.3 | -0.1% | 117.7 | 121.0 | 2.8% |
Individual | 12.3 | 14.9 | 21.3% | 70.8 | 60.4 | -14.7% |
Estoque (Outlets) | 27.7 | 32.7 | 18.2% | 89.2 | 109.0 | 22.1% |
Other | (0.9) | 1.9 | -316.0% | (2.0) | - | -100.0% |
Breakdown per Brand | Breakdown per Channel | |||||||||||
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LE LIS
Channels e Brands