Grupo Mateus (GMAT3) says that sales in the 2nd quarter are advancing; actions soar

The CEO of Grupo Mateus (GMAT3), Ilson Mateus, said this Tuesday (10) that same-store sales (SSS) are at levels “well above expectations” in April and early May. . Thus, the expectation is that the quarterly results for this period will be above the initially expected.

The statements were made during a conference call to present the results of the first quarter, when Grupo Mateus (GMAT3) recorded net income of R$ 199 million, an increase of 27.1%. The shares of the wholesale company soared 7.39%, quoted at R$4.65.

In the electronics sector, the executive stated that there was a very large improvement in sales with Auxílio Brasil, despite the first quarter being weaker, with inventory burning. He also said that in the furniture sector, he has been focusing on efficiency and deliveries.

According to a balance sheet released the previous day, same-store sales were up 12.7% compared to the same period in 2021, an acceleration of 2.5 percentage points in the pace of growth.

Cash and carry grew by 0.3 percentage point in same-store sales, and a 37.6% increase in gross revenue. Retail registered a decrease of 0.9 percentage points in SSS, but an increase of 32.2% in revenue. In home appliances, Grupo Mateus saw a 19.0 percentage point drop in SSS, but a 31% increase in revenue.

Earnings before interest, taxes, depreciation and amortization (Ebitda) was R$262.3 million in 1Q22, 25.2% higher than the R$209.5 million in the first quarter of 2021. Ebitda margin, however, retreated 0.5 percentage point, to 5.7%.

Inflation and new stores pressure gross margin

In the conference call to analysts, the board of Grupo Mateus stated that the gross margin was pressured by inflation and the opening of new stores, which take six months to start performing. Land sales performed well, with a lower margin, but cost dilution.

According to the balance sheet, Grupo Mateus closed the quarter with 218 stores, 48 ​​more than it had at the end of the same period in 2021, with 16 opening only in 1Q22.

In the first quarter, the company was able to reduce inventories, said the board. This occurred despite the opening of new cash and carry stores, which require larger inventories.

Asked about Capex (investments), the CEO of Grupo Mateus, Ilson Mateus, said that the company has the cash to carry out the expansion scheduled for the end of 2022.

Cash generation is expected to be very strong. So the company can take on some debt, but relatively little, targeting 2023, he said.

balance sheet analysis

In a report, Credit Suisse assessed results as mixed, with solid net sales growth, driven by the opening of 16 stores during the quarter, maturation of previously opened stores and high SSS (same store sales).

On the other hand, gross margin contracted 150bps y/y to 22.3% of sales, slightly below Credit Suisse and market estimates.

“Despite the strong overall growth of Grupo Mateus, mainly due to its accelerated expansion plan, we are increasingly cautious with the deterioration of margins. This leads us to question what will be the price of profitability of Grupo Mateus’ growth plan ahead”, highlights Credit Suisse.

Lower net financial results led to consolidated net income of R$199 million (+27.1% y/y), above Credit Suisse and market estimates by 17% on average. The rating is outperform (performance above the market), with a target price of R$ 7.00.

better than expected

For XP, Grupo Mateus (GMAT3) had a better-than-expected 1Q22 result, but the margin remains under pressure.

For XP’s analysis team, Grupo Mateus (GMAT3) presented better-than-expected results in the first quarter, despite the margin still under pressure due to the challenging macro context and the company’s strong expansion plan.

XP reiterates buy recommendation for Grupo Mateus and target price of BRL 9.

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