16.5 percent drop in B2B channel impacts Veste's Q3 results

In the third quarter of 2024, Veste recorded a gross revenue of 329.2 million Brazilian real, a decrease of 2.7 percent. The company’s consolidated same store sales rose 1.9 percent and considering only the Le Lis, Dudalina and Bo.Bo brands, the same-store sales indicator was 4.5 percent.

The company said in a statement that the performance is a result of the B2B channel, which showed a drop of 16.5 percent. The quarter’s results were also impacted by the John John brand, which operated with 10 fewer stores and supply challenges at the Le Lis and Bo.Bo brands.

“The reversal of the trajectory of the John John brand and the B2B channel is a short-term priority for Veste and represents an important growth opportunity in the medium term. In the fourth quarter of 2024, the first results of the actions taken by the company to achieve this goal will already be evident,” Veste said.

Highlights of Veste’s Q3 performance

The company’s B2C channel closed the quarter with revenues of 234.7 million Brazilian real, a decrease of 1.1 percent impacted by the performance of the John John brand, which showed a 20.5 percent drop in the channel.

In the nine month period, the channel grew 1.8 percent. B2C digital sales improved by 6.8 percent during the quarter under review. ·

The company further said that the outlet channel reached a gross revenue of 29.4 million Brazilian real in the quarter, reflecting a growth of 27.5 percent.

The company registered an adjusted gross margin of 62.7 percent declined 0.7 p.p., adjusted EBITDA of 44 million Brazilian real, down 12.1 percent with adjusted EBITDA margin of 16.4 percent, down 1.8 p.p. Adjusted net income for the quarter was negative 10 million Brazilian real, with an adjusted net margin of negative 3.7 percent.

Except Le Lis, Veste’s brand portfolio records sales decline

Among the brands, Le Lis reported a growth of 5.6 percent to 157.3 million Brazilian real, with an increase in same store sales of 6.8 percent.

Dudalina, with revenues of 56.5 million Brazilian real, saw a slight decrease of 1.3 percent driven by the B2B channel.

In the quarter, John John had a gross revenue of 41.5 million Brazilian real, a decrease of 29 percent. Bo.Bo recorded a gross revenue of 28.3 million Brazilian real, down 1.6 percent due to supply problems throughout the period and Individual brand revenues of 17.1 million Brazilian real were down 23.6 percent.

The company ended the quarter with 172 stores, with 163 single-brand stores and nine outlet stores.