Cencosud reported a solid performance in its financial results during the second quarter of the year, mainly due to the successful consolidation of The Fresh Market in the United States and GIGA Atacado in Brazil reported the Chilean company.
Revenues increased 12.9%, reaching $4,518 million, the ninth consecutive quarter of double-digit sales growth.
Cencosud’s positive returns are also the result of the increase in market share of its supermarkets in Chile and Brazil, compared to the same period of 2022.
The Chilean retailer giant celebrated the first anniversary of The Fresh Market under its management, a first-year marked by important financial and commercial synergies, achieving a total impact in Financial Statements of US$ 75.8 million.
“In these 12 months, The Fresh Market has contributed with an Adjusted EBITDA of $ 210 million and an Adjusted EBITDA margin of 10.4% to the company’s consolidated result, exceeding estimates. In addition, during this quarter, we opened the first store post-acquisition and plan to add 22 additional stores in the next 24 months,” said Matías Videla, CEO of Cencosud.
The company’s Adjusted EBITDA grew 17.2% compared to the second quarter of 2022, reaching a double-digit Adjusted EBITDA margin for the 11th consecutive quarter, reaching 10.5%.
This increase is explained by an EBITDA margin expansion in Chile, Argentina and Peru, an improvement in the profitability of the Shopping Centers division, and the incorporation of The Fresh Market and GIGA Atacado.
Meanwhile, Net Income increased 163% YoY to US$ 179 million, explained by the increase in Adjusted EBITDA and the improvement in Non-Operating Income.
“During the second quarter of 2023, and despite a challenging macroeconomic environment in Latin America and the United States, Cencosud continued to generate positive results by achieving revenue and EBITDA margin growth. This reflects the sustained resilience of the company’s core businesses and the solid performance in terms of profitability in countries such as Chile, Argentina and Peru, which again achieved double-digit EBITDA margins,” added the Company’s CEO.
In Brazil, Supermarket revenues increased 13.6% in real terms and 7.1% in Chilean pesos. This growth is mainly explained by the acquisition of GIGA Atacado and increased sales of the Cash&Carry format. In Supermarkets Chile, revenues increased 6.6% compared to the second quarter of 2022, driven by same-store sales of 5.5%, an 8.6% growth in online sales, and the opening of four new Spid stores (Convenience format).
As part of Cencosud’s progress at the consolidated level in the second quarter, there was a 13.8% increase in the number of sales tickets compared to the same period last year, reaching a total of 162 million. This is in addition to six store openings and the remodeling of 41 stores at the regional level.
In terms of its commercial strategy, the company has continued to strengthen its regional Private Brands proposal, making progress in expanding the supply of basic market basket products and providing a greater variety of differentiating options.
Regarding omnichannel, Cencosud achieved an online penetration rate of 10.4% of total sales in the year’s second quarter.
At the same time, there was a 14% growth in the number of Prime program subscribers in Chile, Peru, and Colombia between December 2022 and June 2023.
Finally, among the quarter’s milestones was CencoPay, a new digital payment method through which the company seeks to continue strengthening its digital ecosystem, exceeding 225,000 downloads since its launch.
In addition, the company announced its investment and entry into the ownership of the Brazilian startup “Mimo Live Sales” and the launch of Cencosud Media in Peru, in addition to its presence in Chile, Colombia and Argentina.
Cencosud is one of the largest and most prestigious retailers in the Americas, with operations in Argentina, Brazil, Chile, Peru, Colombia, and the United States -in addition to a commercial office in China and a technological Hub in Uruguay- where it develops a multi-format strategy that today employs more than 122 thousand people.
Its operation encompasses several business lines, such as Supermarkets, Home Improvement, Department Stores, Shopping Centers and Financial Services.