SALES IN 1Q18

  • Re. Total gross revenue up 7.6% to R$12.3 billion, driven by growth in volume
  • In the same-store basis, gross sales growth was 4.8% (2.8% excluding the calendar effect)
  • The quarter was affected by continued food deflation of -4.0%

Assaí

• Gross sales totaled R$5.5 billion, increasing 25.0%. The additional sales of R$1 billion was driven by 20 store openings and the same-store sales growth ex calendar effect of 9.9% (5.1% excluding conversions);

• The banner continues to capture the effects of the successful strategy, surpassing in yet another quarter same-store growth of 12% in volume and 8% in clients;

• The 17 Extra stores converted into Assaí continued to maintain revenue growth of around 2.5 times;

• In the period, Assaí registered market share gains of 3.8 points, according to Nielsen, with a sustainable level of commercial competitiveness;

• The Passaí Card is already available at all the stores and 205,000 cards issued by the end of March. Average issue rate is around 50,000 cards per month;

• A new Assaí store was inaugurated in Itabaiana, Sergipe. Currently, four new stores are under construction and one is undergoing conversion, in line with the strong pace of expansion set for the year.

Multivarejo

– Total gross sales amounted to R$6.8 billion, affected by food deflation and the closure of Extra Hiper stores converted into Assaí. Same-store sales grew 0.7%:

At the end of December 2017, there was a fire at the refrigerated products Distribution Center, which supplied 496 stores in the meat and perishables categories (around 13% of sales). The estimated loss in sales is approximately R$200 million for the product stockout effect in January and February;

– As of March, adjustments made in the commercial strategy reverted the negative trend from January and February. As a result, same-store sales growth in March reached 11.8% (3.9% excluding the calendar effect).

The main factors that contributed to the best performance were:

• More dynamic promotions on commemorative dates such as Women‘s Day and Consumer Week;

• Greater visibility of promotions at stores, with more horizontal promotions and reduction of stockout;

• Reinforcement of loyalty program with the launch of “My Rewards” in the same app as “My Discount”, which already has over 5 million downloads;

• Normalization of DC operations and store supply in March. .

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