Grazziotin SA

Grazziotin maintains a conservative capital structure with a debt-to-equity ratio of 0.15 and a current ratio of 2.4, indicating strong liquidity and short-term solvency. The company's liquidity position is further supported by cash and equivalents of BRL 144.8 million, which represents 11.6% of total assets. The price-to-book ratio of 0.43 suggests the company is trading at a discount to its net asset value, potentially reflecting market skepticism about future earnings power.

Profitability metrics reveal a modest return on equity of 0.62% and return on assets of 0.44%, both significantly below the industry median for department stores. The operating margin of 0.19% (calculated from operating income of BRL 251,000 on revenue of BRL 128.05 million) indicates thin operating margins, which is typical for the sector but leaves little room for error in cost management or pricing power.

The company's revenue is concentrated in a single business segment, with no disclosed geographic diversification beyond its primary market. This lack of diversification increases exposure to local economic conditions and consumer spending trends. The absence of segment-specific revenue breakdowns in the latest filings limits visibility into potential growth drivers or underperforming areas.

Looking ahead, Grazziotin's revenue is projected to grow by 12.8% in the current fiscal year, with a further 8.3% increase expected in the following year. This growth trajectory is supported by a free cash flow of BRL 13.42 million and capital expenditures of BRL 9.52 million, suggesting the company is investing in its operations while maintaining positive cash flow.

Risk factors remain low, with no immediate liquidity or dilution concerns identified. The company's low debt load and strong liquidity position reduce financial risk, while the absence of dilution flags suggests no near-term pressure to issue additional shares. However, the high price-to-earnings ratio of 68.92 indicates that the market is pricing in significant future earnings growth, which may be difficult to achieve given the company's current profitability levels.

Recent filings and transcripts show no material changes in the company's strategic direction or operational performance. The latest earnings report confirmed revenue of BRL 128.05 million and net income of BRL 5.51 million, aligning with analyst estimates. No significant new initiatives or capital allocation changes were disclosed in the most recent investor communications.

Grazziotin's net margin of 4.3% significantly exceeds the 1.5% median for the Department Stores cohort.

The company maintains a conservative debt-to-equity ratio of 0.15, well below the cohort median of 0.52.

Revenue demonstrated consistent growth, achieving a 5.0% CAGR from fiscal year 2004 to 2008.

Gross profit expanded to BRL 399.6 million in 2008, reflecting top-line resilience despite margin pressures.

Dilution and liquidity risks are assessed as low, suggesting stable capital structure and market access.

Return on equity of 0.62% trails the 1.83% median for the Department Stores cohort significantly.

The company faces high credit risk, posing potential challenges for financing and counterparty confidence.

Revenue BRL 219.7M, +1,4% YoY; Operating income −30,3% YoY.

• ▍Revenue BRL 219.7M, +1,4% YoY
• ▍Operating income −30,3% YoY
• ▍Net income −36,8% YoY
• ▍Free cash flow −177,1% YoY
• ▍Net margin 14.2%

Revenue BRL 164.9M, −2,8% YoY; Operating income −69,7% YoY.

• ▍Revenue BRL 164.9M, −2,8% YoY
• ▍Operating income −69,7% YoY
• ▍Net income −65,7% YoY
• ▍Free cash flow −26,1% YoY
• ▍Net margin 5.0%

Revenue BRL 224.8M, +5,0% YoY; Operating income +6,8% YoY.

• ▍Revenue BRL 224.8M, +5,0% YoY
• ▍Operating income +6,8% YoY
• ▍Net income +55,4% YoY
• ▍Free cash flow +51,4% YoY
• ▍Net margin 17.8%

Revenue BRL 135.4M, +5,7% YoY; Operating income −2 502,8% YoY.

• ▍Revenue BRL 135.4M, +5,7% YoY
• ▍Operating income −2 502,8% YoY
• ▍Net income −19,9% YoY
• ▍Free cash flow −49,5% YoY
• ▍Net margin 3.3%

Revenue BRL 216.7M; Operating income BRL 34.3M.

• ▍Revenue BRL 216.7M
• ▍Operating income BRL 34.3M
• ▍Net margin 22.7%

Revenue BRL 169.8M; Operating income BRL 15.7M.

• ▍Revenue BRL 169.8M
• ▍Operating income BRL 15.7M
• ▍Net margin 14.2%

Revenue BRL 214.0M; Operating income BRL 31.1M.

• ▍Revenue BRL 214.0M
• ▍Operating income BRL 31.1M
• ▍Net margin 12.1%

Revenue BRL 128.1M; Operating income BRL 251.0k.

• ▍Revenue BRL 128.1M
• ▍Operating income BRL 251.0k
• ▍Net margin 4.3%

Revenue BRL 744.8M, +2,2% YoY; Operating income −31,4% YoY.

• ▍Revenue BRL 744.8M, +2,2% YoY
• ▍Operating income −31,4% YoY
• ▍Net income −19,9% YoY
• ▍Free cash flow −135,6% YoY
• ▍Net margin 11.3%

Revenue BRL 728.6M, +7,7% YoY; Operating income +43,2% YoY.

• ▍Revenue BRL 728.6M, +7,7% YoY
• ▍Operating income +43,2% YoY
• ▍Net income +9,4% YoY
• ▍Free cash flow +60,8% YoY
• ▍Net margin 14.4%

Revenue BRL 676.8M, −0,8% YoY; Operating income −40,5% YoY.

• ▍Revenue BRL 676.8M, −0,8% YoY
• ▍Operating income −40,5% YoY
• ▍Net income −19,7% YoY
• ▍Free cash flow −16,8% YoY
• ▍Net margin 14.1%

Revenue BRL 682.4M, +11,2% YoY; Operating income −52,1% YoY.

• ▍Revenue BRL 682.4M, +11,2% YoY
• ▍Operating income −52,1% YoY
• ▍Net income −31,8% YoY
• ▍Free cash flow −65,9% YoY
• ▍Net margin 17.5%