Falabella, a Chilean retailer, reported a net profit for the first quarter of 2021. This marks a significant turnaround from a loss in the same period last year. The company’s profitability was driven by its operations in Peru, where it recorded a net profit of 58.5 billion pesos for the January-to-March period. Additionally, Falabella’s units in Chile, Colombia, and Brazil also contributed to trimming losses from the previous year.
Revenues for Falabella rose by 4% to 2.86 trillion pesos during the quarter, largely due to the foreign-exchange effect of the weaker Chilean peso compared to local currencies. CEO Alejandro Gonzalez noted an increase in visits to shopping centers and a reduction in inventories by 11% during the quarter. Furthermore, Falabella’s loan portfolio grew by 1% year-over-year, but delinquent payments also saw a slight increase to 4.4%.
Falabella’s core earnings more than doubled to 296.95 billion pesos during the first quarter, driven by improved performance across its various business segments. The company operates supermarkets, department stores, home improvement stores, delivery services, and financial services in several countries across Latin America.
Earlier this year, Falabella announced plans to invest $508 million by 2024 with a focus on store openings, remodeling e-commerce development digital banking logistics and reducing leverage through non-core asset sales. The company aims to boost profitability through these investments after implementing a plan that reduced leverage ratio from 7.3x to 5.7x in Q1 as it continues to strengthen its financial position.
In summary