Saga Falabella S.A.

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What it is

Saga Falabella S.A. sells national and imported merchandise through the Retail and Services segments, operating the most recognised department-store brand in Peru across fashion, home appliances, electronics, and beauty.

At 31 December 2024, the company operated 32 stores nationwide under its “Saga Falabella” brand, plus an online sales channel. Falabella’s entry into Peru dates to 1995, when it acquired the Saga chain, which had been trading in Peru since 1953.

The company was formally incorporated on 11 November 1953 — first as Sears Roebuck del Perú, then as Sociedad Andina de los Grandes Almacenes, and renamed Saga Falabella in September 1999.

Saga Falabella operates a chain of department stores selling products across electrohome, technology, furniture, shoes, sports, accessories, beauty, and fashion for men, women and children. Its main Peruvian competitors are Ripley, Oechsle (Grupo Intercorp), and Topitop.

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Who owns it

The company is a subsidiary of Inverfal Perú S.A.A., which holds 98.79% of the issued capital; Inverfal Perú is itself a subsidiary of the Chilean Falabella Group. That leaves a public free float of just 1.21%, spread across 295 minority shareholders — meaning the stock is very thinly traded.

The Chilean Falabella Group — founded in Santiago in 1889 by Salvatore Falabella, and long shaped by the Solari family — is the ultimate controlling parent, operating malls, supermarkets, home-improvement stores, and banking across Latin America. Saga Falabella has 156.71 million shares outstanding.

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Who runs it

Alex Zimmermann Franco, an Industrial Engineer from Universidad de Lima with a Harvard Business School Executive Education master’s degree, joined the company in 1997 and has served as Chief Executive (Gerente General) since September 2013.

Board Chairman Francisco Irarrázaval Mena — a Civil Industrial Engineer from the Pontificia Universidad Católica de Chile and Master in Economic Development from Harvard — brings more than 15 years of retail experience and has served on the board since March 2021. At 31 December 2024, the board comprised three directors in total.

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The money, in plain words

At year-end 2024, Saga Falabella reached revenues of S/ 3,834.8 million (US$1.1 bn), a 5.0% increase over 2023. Converted at the current rate, that is roughly US$ 1.1 billion in annual sales — a substantial business for a single-country retailer.

The company posted a net gain of S/ 154.7 million (US$45 mn) in 2024 — a net profit margin of 4.0% (our calculation), meaning it kept about four cents of profit from every sol of revenue. That is thin by consumer-staples standards but respectable for a full-price department store in a competitive market.

The profit recovery was dramatic: earnings of S/ 154.7 million (US$45 mn) in 2024 represented an increase of 196% over 2023, when near-break-even results reflected a year without a winter season and weak consumer spending. The return on equity — what owners earned on each sol of capital — was approximately 38% on a trailing basis (S&P Global / StockAnalysis), driven partly by the shrinkage of equity from dividend payments rather than pure earnings power alone.

At 31 December 2024, the cash balance stood at S/ 267.7 million (US$79 mn), held mainly in short-term deposits, current accounts, and cash in stores. By year-end 2025, the company had no third-party financial debt at all.

A retailer sitting on S/ 419.3 million (US$123 mn) in cash and owing banks nothing is a conservative, low-risk balance sheet.

In full-year 2025, Saga Falabella grew revenues a further 8.5%, reaching S/ 4,160.6 million (≈ US$ 1.22 billion, our calculation). Growth was driven by stronger promotional campaigns — Mother’s Day, Cyber Wow, Día del Shopping — and a boost to private consumption from the government-approved release of pension-fund (AFP) savings.

The price-to-earnings ratio of about 4.4× is extremely low by global retail standards — the market is pricing in execution risk and the thinness of the free float, not rewarding the improving fundamentals. The stock paid an annual dividend of S/ 1.82 (US$0.53)per share in trailing twelve months, producing a trailing dividend yield of roughly 26% — but this reflects an extraordinary distribution rather than a sustainable recurring payout, and investors should not assume it repeats.

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What it is doing now

The 2024 revenue increase was fuelled by better weather conditions compared to 2023’s absent winter, plus extraordinary state measures including the release of CTS and AFP funds, and stronger performance at key promotional events.

A key 2024 capital allocation event was S/ 245 million (US$72 mn) in dividends paid to the parent, of which S/ 200 million (US$59 mn) went to Inverfal Perú in the final quarter. In 2025, the company invested S/ 92.3 million (US$27 mn) in store refurbishments and distribution-centre upgrades — more than three times the 2024 capex — signalling a renewed push to improve the in-store experience.

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What to watch

• Profit sustainability: The 2024 profit tripling partly reflects a low 2023 base; watch whether the ~4% net margin holds or improves as costs stabilise.
• Consumer environment: Peru’s GDP grew 3.3% in 2024. The one-off boost from AFP pension-fund releases will not recur indefinitely — and with it goes a meaningful tailwind to consumer spending.
• Free-float illiquidity: With 98.79% held by the Falabella Group, daily trading volume is minimal; the share price can move sharply on thin volume, making it unsuitable for investors who need easy exit.
• Parent strategy: Any restructuring of the broader Falabella Group — which operates in Chile, Argentina, Colombia, and Peru — could directly affect Saga Falabella’s ownership, financing, or dividend policy.
• Debt-free balance sheet: The company closed 2025 with zero third-party financial debt, which removes refinancing risk but also means future investment spending must be funded from cash generation or intercompany loans — a discipline that bears watching.

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This is news, not investment advice.