Chilean retail giant Falabella reported a net profit for the first quarter, reversing a loss from the previous year. The company’s strong performance in Peru drove the positive results, with operating profits from its units in Chile, Colombia, and Brazil contributing to the improvement.
Falabella’s net profit for January to March reached 58.50 billion pesos, up 4% from the same period last year. Revenues were up by 4% to 2.86 trillion pesos, largely due to the impact of foreign exchange rates. The company saw an increase in shopping center visits and reduced its inventories by 11% in the quarter, according to CEO Alejandro Gonzalez.
Core earnings, as measured by EBITDA, more than doubled to 296.95 billion pesos for the first quarter. Falabella operates a variety of retail stores and financial services across Latin America and has plans to invest $508 million by 2024. The company is focusing on store openings, remodeling, e-commerce, digital banking, and logistics to enhance profitability.
Falabella has been working to reduce its leverage, with a focus on bringing down its net financial debt over EBITDA ratio. In the first quarter, the retailer’s leverage stood at 5.7x, down from 7.3x the previous year. The company has also divested non-core assets and cut back on spending to improve financial performance.
