Smart Fit, Latin America’s largest fitness chain, reported a steep decline in fourth-quarter profit despite substantial revenue growth, according to financial results released Thursday.
The company earned R$196.5 million ($33 million) in Q4 2024, representing a 71% decrease from the same period last year. Revenue grew significantly to R$1.54 billion ($257 million), rising 36% compared to Q4 2023.
This growth came primarily from the company’s expanding business footprint, with its gym network increasing by 21% to 1,743 locations across Latin America.
The customer base expanded by 17%, reaching 5.21 million members by the end of December. EBITDA jumped 47% to R$487.1 million ($81 million), with margins improving by 2.3 percentage points to 31.6%.
When excluding tax effects, the profit decrease measured just 6% on a recurring basis. Smart Fit attributed the profit decline to expansion costs and higher financial expenses affecting overall profitability.
For the entire 2024 fiscal year, Smart Fit recorded a profit of R$539.4 million ($90 million), down 54% from 2023. Annual revenue climbed 31% to R$5.58 billion ($930 million), showing the company’s continued market penetration strategy remains effective.
Smart Fit’s 2024 Growth & Financial Outlook
The aggressive growth strategy has increased the company’s debt load considerably. Net debt rose to R$2.99 billion ($498 million) at year-end, more than doubling from R$1.3 billion a year earlier. The company’s leverage ratio increased from 0.68 to 1.16 times EBITDA.
Smart Fit maintained a healthy cash position of R$2.94 billion ($490 million) as of December 31. The company described 2024 as a year of “solid execution” with “record expansion,” surpassing its original guidance by opening 305 new gyms throughout the year.
Operating cash flow increased 8% to R$462.1 million ($77 million) in the quarter. The company reported a negative variation of R$34.2 million ($5.7 million) in its working capital during the same period.
“The results achieved in 2024 reinforce our commitment to excellence and long-term strategic vision,” Smart Fit stated in its earnings release. Management remains confident about future growth prospects despite the temporary profit decline.
This article was produced by The Rio Times’ automated AI newsroom. Editorial responsibility: Matthias Camenzind, Publisher and Editor-in-Chief. The Rio Times also runs Ask Rio Times, which answers from 100,000+ of our own articles, the daily Latin America Power Map, and prediction-market odds on elections and markets.. How we use AI · Report an error
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