The cash and carry chain Assaí is confident of obtaining a stronger result in the last quarter of the year than in the third quarter, while promoting an accelerated program of store openings, while customers increase product inventory levels for an end of the year marked by World Cup.
“We have expectations of volumes (sales) better than in the third quarter… the adjustment (reduction) of customer inventories has already taken place in the third and the next one will be the first quarter post-pandemic and we will still have the Cup”, said the president. -company executive, Belmiro Gomes, in videoconference with analysts.
“We have highly positive expectations (about store openings in the fourth quarter)”, added the executive. He acknowledged, however, that in some product categories, such as those that depend on imported inputs and linked to oil prices, consumers are still making adjustments in their shopping baskets.
Assaí shares were among the highest on the Ibovespa at 12:52 pm, advancing 3.8%, while the index showed a gain of around 1%. The next revision of the composition of MSCI stock indices could include Assaí shares in the Latin America index, Bank of America strategists predicted.
The company controlled by French Casino announced a 48% drop in third-quarter net income over the same period in 2021, but the result came above market expectations, driven by same-store sales growth of around 9 %.
The group has a goal of reaching annual revenue of over 100 billion reais by 2024. In the year to September, revenue totaled 42.2 billion reais, an expansion of 28% over the first nine months of 2021, or 65 billion in annualized terms.
Asked about the goal at a time when the company is stepping on the accelerator to reopen 70 stores purchased from Extra in 2021, Gomes reaffirmed the goal and added that its fulfillment “is at an even better point than we had planned”.
He pondered that the company, however, will expect additional openings of stores purchased from Extra and a longer period of maturation. “Maybe in the release (of the fourth quarter balance sheet) we will come up with a more optimistic number.”
Regarding margins, the financial director, Daniela Papa, stated that as Assaí will expand the opening of Extra stores in the fourth quarter after 14 conversions from July to September, general and administrative expenses as a percentage of net revenue “will still be above 9 %, absolutely”.
To emphasize the size of the program to expand the Assaí store network, financed in part with its own cash generation, Gomes mentioned that the volume of concrete to be consumed by the chain this year is equivalent to “six Maracanã stadiums”.
The company has a goal of reopening 45 stores under its brand this year, which implies about 30 conversions in the fourth quarter alone. By comparison, bigger rival Atacadão, owned by Carrefour Brasil, plans 12 openings in the second half of 2022.
Assaí is still planning another 25 conversions by the end of the first half of next year, reaching the end of 2023 with a total park of around 300 stores.
Atacadão had 321 stores by the end of June this year and another 33 called “delivery wholesale”.
Asked about the working capital needed to build up high inventories for these conversions, the commercial vice president, Wlamir dos Anjos, said that Assaí has balanced the equation because the new stores, located in highly urbanized areas, have attracted a large flow from clients.
In addition, according to the executive and Gomes, Assaí has managed to extend payment terms with suppliers. “The improvement (in working capital) will probably be visible in the numbers for the first quarter of next year”, said Gomes.
Source: CNN Brasil
Joe Jameson, a technology journalist with over 2 years of experience, writes for top online news websites. Specializing in the field of technology, Joe provides insights into the latest advancements in the industry. Currently, he contributes to covering the world stock market.
