What: Fitch Ratings has upgraded Falabella’s debt outlook from "negative" to "stable," reflecting improved profitability driven by strategic initiatives focused on more profitable units and cost efficiencies.

Why it is important: This upgrade signals increased confidence in Falabella’s ability to sustain its financial recovery, positioning the company for long-term growth in a competitive retail environment.

Fitch Ratings has revised Falabella’s debt outlook from “negative” to “stable,” citing a significant improvement in the company’s profitability. This change is attributed to Falabella’s strategic focus on prioritising more profitable units and brands, as well as enhancing operational efficiency. The company reported a net income of USD 97 million in the third quarter of 2024, marking its best performance in three years. Revenue for the period reached USD 3.169 billion, with Fitch projecting that Falabella's EBITDAR margin will stabilise in the low double digits by year-end, a notable increase from the 7% margin in 2023. Despite these positive results, Fitch highlighted challenges ahead, including the need for Falabella to adapt to evolving consumer preferences while maintaining financial stability. The company’s future strategy includes continued investment in technology and omnichannel solutions to meet growing consumer demand for personalised and convenient shopping experiences.

Fitch upgrades Falabella Group’s outlook to ‘Stable’ after profitability rebound