Good afternoon, everyone. Welcome to Organización Soriana's Third Quarter 2024 E arnings Conference Call. With us today are Mr. Rodrigo Benet Córdova, CFO of Organización Soriana, and Ms. Claudia González Romero, Head of Investor Relations for Organización Soriana. Together, they will be discussing the financial performance for the third quarter of 2024 , and providing a summary of the latest news on the company. At the end of the presentation, there will be a Q&A session to answer any questions you might have. We would like to mention that all lines have been placed on mute as to prevent any background noise. At the beginning of the Q&A session, we will provide instructions as to how you may participate in today's conference call. Please note that the conference call may be recorded. I will now turn the conference over to Mr. Rodrigo Benet Córdova, CFO of Organización Soriana.
Please go ahead.
Thank you very much. Good afternoon, everyone, and thank you for joining us in this conference call regarding the third quarter results. Today, as you already hear, is with me, Claudia González, Head of Financial Planning and Investor Relations, and together, we will go into the results. As you already know, in the last 12 months, the company has been completely focused on improving the competitiveness and the price perception in front of our customers. However, we know that this is a long-term bet, from which we will not give up until we obtain the expected results. In fact, we have already observed positive reaction in different states of the country.
Although we know that it will be as slow to see it reflected in all the states or at the national level, we will continue to promote this strategy, which will only be possible by leveraging or taking leverage from other businesses, such as real estate, the promotion of our digital business, investing in new store, remodeling, and of course, the relaunching of the wholly owned and exclusive brands. That allow us to compensate the investment in price with these other initiatives that help us to maintain a good gross margin.
Talking about the performance at a store format level, our stores, Soriana Híper and Soriana Súper, show the best sales performance due to the efforts we have done to ensure competitiveness and promotions, particularly within the basic food basket, which also has helped us to improve price perception in this matter, and the strong efforts to accomplish the client's needs during Julio Regalado campaign. Regarding performance at a category level, fresh goods, groceries, and prepared food, outstanding this quarter, aligned to the strong commercial activity, focuses on these specific categories. From a geographical perspective, sales performance go better in the states of Campeche, Guerrero, Tamaulipas, Coahuila, and particularly, the Valle de México. Also, moving to our digital business, we are conscious that it's a challenge to develop a strong offer and to stay above other players and maintain our clients' preference.
And we are ready, focusing to grow the product catalog, as well as to provide user-friendly interface, working to improve functionality, and most important, ensuring security across all transaction process. Also, it's important to mention that we are still investing in developing the business for all the formats, including City Club, where in this quarter showed a 221% increase in sales and in the e-commerce, combined by an increase in the ticket and also in the traffic. Talking about our real estate business, this one showed an increase of 3% in the income comparing with the same quarter of the last year, and a consistent increase in occupancy level from 87% to 90% in the last twelve months, in which particularly Monterrey, Southeast and Pacific, showed the higher occupancy rates.
As a result of the previous detail, the company closed the third quarter of the year with a total sales of MXN 43.1 billion , which represent an increase of 0.6% in comparison with the same period of last year. In cumulative terms, sales reached MXN 130 billion with an increase of 2.7%. Likewise, gross profit reached MXN 10.5 billion in this quarter, which represent a 24.4% margin, with an increase of 9.5% against last year. As a result of positive negotiation with the suppliers and the improvement of shrink management, along with the supply chain, that allow us to expand 200 basis points of gross margin. Also, we are receiving the benefit from the recovery of the real estate business and a higher penetration of the private brand.
Regarding the operating expenses, this line reached MXN 7.7 billion, representing 18.1% over the sales, an increase of 12% versus last year. This increase is principally attributable to personnel costs due to a better vacancy coverage and the minimum salary increase that is impact the expense during the last two years, and in addition, a higher-
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Yes.
Thank you. Sorry for the inconvenience that we have with the technology. I will resume the conference. We were talking about basically the increase in operating expenses line, that the main lines that participate in this increase is basically the personnel costs and advertising, that both increase are related with the strategy of the company. First of all, to increase the level of service in our stores, and secondly, continue with this promotion of the perception of low prices in all the states of the country, that we will continue doing that into the future, into the following months. As a consequence of the increase just mentioned, EBITDA of the quarter reached an amount of MXN 2.7 billion, with an increase of 1.6%, which represent a margin of 6.3% in cumulative terms.
On the other hand, and regarding the financial items, net financial costs have an increase of 26.6% versus the same quarter of the last year, mainly due to an increase in the financial product that is related with the equity swap gain that we have in the same quarter of last year, and that obviously create a disadvantage in the comparative of this quarter. Finally, the net income reached MXN 538 million in this third quarter, and MXN 2.5 billion in cumulative terms. As an update of the CapEx for the year, it's important to say that the company is planning to maintain it, and in fact, to accelerate expansion and remodeling plan due to the excellent results that we have seen in the recent openings.
As I mentioned in previous conference, it's very important for Soriana and this program of remodeling the stores. We know that is part of the client experience, and we will continue investing in that. Mainly, we are seeing very positive result. Once that we make this important remodeling in the stores, we obtain changes between 25%-40% increase in the sales, and particularly in the new stores that born with the new store concept, the new layout, the new planogram. In general terms, the sales per square meter against the regular or historical stores is more than double, so we need to accelerate this conversion of the platform of stores of the company.
In the last 12 months, we have opened 15 stores, mainly in the states of Tamaulipas, Coahuila, Baja California, Chihuahua, Nuevo León, and San Luis Potosí, and we have performed more than 17 big remodeling processes, investing a total of MXN 7.7 billion in the last two months, again, with very good results that we expect to continue doing going into the future. Moving on to talk a little about our partnership with Falabella. This quarter, Sodimac, the home improvement business, show an increase of 5.4% in sales. Remembering that we have right now 14 stores in operation, and we are planning to open a new one in the following weeks. Talking about the financial business, this one keeps growing very healthy.
During this quarter, more than 88,000 cards were issued, reaching a total of 813,000 active cards, and a great portfolio of a little more than MXN 4.5 billion. We are really happy with this business. Right now, the Falabella Credit Card is practically the main credit card as a method of payment in Soriana, particularly in the big seasons like Regreso a Clases or December, Julio Regalado, Buen Fin. So we are really happy with the performance of this financial business. That is also helping us to increase the loyalty and the returning traffic of our clients. Basically, with this, we end the presentation, and we can go to the Q&A session. Thank you once again for joining us.
We will now start the Q&A session. If you have a question, please enter star eight on your telephone keypad. In case your question has been answered, you may cancel it by pressing star eight again. As a reminder, if you have a question, please enter star eight on your telephone keypad. The first question is from Mr. Miguel Ulloa, from BBVA. Please, go ahead.
Hi, Rodrigo, Claudia, good morning. Thanks for taking my question. The first one would be regarding the consumer environment. Could you provide additional color of what you're seeing and how things moved during the quarter, and how things are moving this October? Thank you very much.
Sure, well, right now, we're seeing probably the first signs of pressure in the consumption. Actually, if I don't remember wrong, I don't know, last week, we saw a release about the transaction, not only for the ANTAD stores, but for the general transaction of consumption in the country. And if I don't remember wrong, it had a small contraction. So obviously, that is something that concerns us. Particularly, talking about the performance in the formal store or stores like Soriana, we are a little worried, but to be completely honest, we are much more focused into the internal things that we can change.
I think that the pressure that we have right now in our results is more related with internal issues or internal facts and things that we have to do better, than coming from external factors that are pressure in the consumption. If you see the results of ANTAD and our competitors are very healthy, so I think that we have to continue working in the initiatives that we already mentioned, the initiatives that we have mentioned in the previous conference call. Particularly, continue working in perception of brands and recovering the traffic that we have lost in the last 18 months. And basically, that is the focus. If you ask me, Miguel, if we are seeing important change in trends, like going from expensive proteins like beef to cheap proteins of like egg or chicken, no.
Also, we are not seeing an important decrease in the sales of clothes or general merchandise. Actually, in some categories, we are seeing a good performance. So, I think that in general, consumption is still healthy. Again, we saw the last week the first sign of pressure, but I think that in general terms, consumption is right now healthy. Obviously, initiatives the federal government is putting in place, like increase the federal programs of benefits, increase the salary, things like that, for sure have a positive impact in consumer consumption. I mean, it's an important amount of money, the one that is committed to this federal programs.
So I think that in general, still the environment is healthy, and we are much more focused in internal things than be worried for external things, Miguel.
Thank you. That's helpful. And my second one, if I may, could you share with us the growth in e-commerce and the usage of the new app?
Sure. Well, in e-commerce, we are really happy with the performance. It's continued increasing in double digits. Particularly, we see the increase across all the different, let's say formats, that we operate. Remember the Soriana App, the Soriana webpage, but also we work with external companies, with Uber and with Rappi. The growth that we are seeing in general in our e-business is coming from three of them. Also, Rappi and Uber is growing at a double digit rate, equally happened the same in the Soriana App. Probably, the only one that is not having the same rate of growth is the webpage. It's growing, but not at the same level that the Soriana App or the Rappi or the other app, that makes sense.
In general terms, we believe that the e-commerce, particularly for home delivery, I mean, not the big catalog or the big price articles, but the daily consumption makes a lot of sense that the major channel to do that is the app and not the webpage. So in general, that makes sense, and also the new generation are more likely to operate in the cellular phone and not in the webpage. The other important thing that we are seeing about our e-business is that we are having the opportunity to show to the clients that Soriana is more than fruit and vegetables, that it will be really difficult to do it in the physical store. Like an example, right now, we have a huge success in the sales of motorcycles, huge success in the sales of scooters.
Also, we are having a very good performance in skincare and also in cologne and perfumes. I mean, high ticket articles that in general doesn't make sense to have it in the physical stores because of inventory and offerings of that. But in e-commerce, we can have a huge catalog product, actually, with this strategy that we have the dropship vendor, like an example, we just add a huge catalog of Tecnolite, this important supplier for lighting articles. That doesn't make sense to have a huge catalog like that in the physical store, but we can have it in the e-commerce platform. We doesn't have to pay the cost of that inventory. It's very efficient. And right now, the distribution efficiency that we have is that in general, all our articles, we are delivering in an average of three days.
Talking about general merchandise, obviously, the daily consumption is in the same day, but general merchandise, in average, is three days. That actually is really good. So we are also really happy to have the opportunity to offer to the client a lot of products that regularly they would not find it in store.
Thank you very much. That's helpful.
Thank you very much for your question. As a reminder, if you have a question, please enter star eight on your telephone keypad. That was the last question. We will now hand over to Mr. Rodrigo Córdova for final comments. Please go ahead.
Thank you for joining in this conference call. As and always we said, if you have any additional doubt, please give us a call or email to Claudia and me. And thank you again for be with us in this conference call. Have a good weekend. Bye.