Veste's Q2 sales up but weak demand for John John impacts results

Brazilian high-end fashion firm Veste reported gross revenue of 371.9 million Brazilian real in the second quarter, a 3.3 percent increase compared to the same quarter of 2023.

The company said in a release that the performance was led by the positive evolution in brands Dudalina, Le Lis and Bo.Bo and B2C channel, partially affected by the result of the John John brand.

Adjusted gross margin of 65 percent, declined 2.7 pp, adjusted EBITDA of 67.2 million Brazilian real, increased 2.9 percent, while adjusted net income was 10.7 million Brazilian real, with a net margin of 3.6 percent.

Review of Veste’s financial results

The company’s B2C channel’s gross revenue was 291.8 million Brazilian real, up 3.7 percent and B2C digital revenue of 64 million Brazilian real, an increase of 17 percent, while physical stores saw 0.5 percent growth, despite a reduction of 4 percent in the store base.

The company ended the quarter with 175 stores, with 166 single-brand stores and nine outlet stores. In the second quarter, a new Dudalina store in Campo Grande and a new outlet at Rodovia dos Imigrantes were inaugurated, in addition to the closing of two John John units.

With the positive impact of B2C digital, the company’s digital sales totaled 97.5 million Brazilian real, up 20.9 percent.

The B2B channel ended the quarter with revenue of 53 million Brazilian real, down 3.9 percent due to the decrease in sales of Individual. In the six month period, the channel recorded 115.5 million Brazilian real revenue, down 15.4 percent.

Operating under the Estoque banner, outlet channel recorded revenue of 27.1 million Brazilian real in the quarter, with a variation of 15.2 percent, while during the first half, the channel had revenue of 46.9 million Brazilian real, an increase of 21.7 percent.

Veste’s brand portfolio except John John and Individual witness growth

The company added that with a revenue of 194.6 million Brazilian real, up 8.8 percent with same store sales of 8.9 percent, Le Lis had the best quarter of sales in its history. In the quarter, Le Lis reopened a store at the shopping Pátio Savassi, in Belo Horizonte. In wholesale, the brand reported 16.7 percent growth.

With revenue of 61.1 million Brazilian real, up 8.3 percent and same store sales growth of 5.7 percent, Dudalina Mother’s Day campaign was able to attract its target audience reinforcing its positioning. In the period, Dudalina inaugurated three stores including two reopening in the new format and a new store in Campo Grande.

Bo.Bo recorded revenue of 32.4 million Brazilian real, an increase of 4.1 percent and same store sales increase of 7.8 percent. The brand’s digital channel achieved growth of 21 percent.

John John ended the quarter with gross revenue of 45 million Brazilian real, a decrease of 13.4 percent. In the second quarter, Individual recorded a gross revenue of 12.1 million Brazilian real, down 36.9 percent and in the six month period, revenue totalled 28.4 million Brazilian real, a decrease of 21.5 percent.