(Adds information on guidance, EBITDA, and management change)
By Gram Slattery
SAO PAULO, Feb 19 (Reuters) - Brazilian food retailer GPA hit quarterly profit estimates on Monday, as sales at its wholesale formats drove growth, though the company’s fairly ordinary results were overshadowed by a leadership shake-up announced almost simultaneously.
In a securities filing, GPA also released guidance for 2018, emphasizing plans to continue to expand its wholesale and digital operations and predicting growth in EBITDA margins across formats.
Fourth-quarter net income at GPA, controlled by France’s Casino Guichard Perrachon SA, came in at 215 million reais ($66.5 million) excluding sales at independent electronics and appliance subsidiary Via Varejo SA. That was roughly in line with a Reuters consensus estimate of 218 million reais.
During the period, the company posted earnings before interest, taxes, depreciation, and amortization (EBITDA) of 756 million reais, slightly beating expectations of 731 million reais.
GPA, like its main rival Carrefour Brasil, has been betting big on the cash-and-carry format, which offers a wholesale experience to final customers, as a three-year recession pushed Brazilians to aggressively seek discounts.
High demand for the format has pushed GPA to convert many of its more traditional grocery stores to the cash-and-carry model, a trend which it plans to continue.
In the results release, GPA said it would continue to convert about 20 stores per year over the next three years with total capital expenditures in 2018 of 1.6 billion reais.
EBITDA margin at the cash-and-carry division should grow about 0.2 percent to 0.3 percent per year annually, while the more traditional ‘Multivarejo’ format should see margin growth of 0.5 to 0.6 percent, the company said.
GPA also emphasized that it would continue to roll out digital and e-commerce initiatives, a focus in line with a management change announced on Monday.
Moments before the fourth quarter results were released, GPA said it was appointing Peter Paul Estermann as its new CEO. Currently the chief executive of Via Varejo, Estermann is credited with turning around the once struggling retailer with tech-savvy initiatives.
$1 = 3.24 Brazilian reais Reporting by Gram Slattery; editing by Grant McCool