C&A Modas (CEAB3) Q1 2025 earnings summary

Executive summary

• Achieved 15% same-store sales growth in apparel and 41.2% net revenue growth over two years, with strong digital sales and a 13.3 p.p. NPS increase year-over-year.

• Beauty category net revenue surged 71.1%, now nearly half of the electronics and beauty segment, offsetting lower electronics sales.

• Merchandise gross margin expanded by 1.9 p.p. to 52.5%, driven by product mix and higher-margin beauty sales.

• Adjusted EBITDA margin rose to 15.2%, up 2.7 p.p. year-over-year, with adjusted net income of R$2.5 million, reversing a prior loss.

• Free cash generation reached R$80.9 million, leverage reduced to 0.5x net debt/EBITDA, and customer base expanded by 6.4% year-over-year.

Financial highlights

• Consolidated net revenue reached R$1,612.1 million, up 10.9% year-over-year, with apparel net revenue at R$1,364.1 million (+15.5%) and beauty up 71.1%.

• Adjusted EBITDA (post-IFRS16) was R$244.5 million, margin at 15.2%, up 2.7 p.p. year-over-year.

• Adjusted net income was R$2.5 million, reversing a loss in the prior year; net income was R$4.1 million, down due to prior-year tax credits.

• CapEx for the quarter was R$40.4 million, up 19.8% year-over-year, focused on store expansion and digital initiatives.

• Free cash flow turned positive at R$80.9 million, with net debt reduced to R$562.6 million.

Outlook and guidance

• Plans to open 5–10 new stores in 2025, accelerate expansion in 2026, and focus on quality locations and sales per square meter.

• Continued investments in store renovations, new concepts, digital technology, and omni-channel integration.

• C&A Energy strategy execution at 40–45% completion, with significant value still to be captured.

• Conservative credit granting to continue, with potential for higher C&A Pay penetration if macro conditions improve.

• Focus on commercial agility, dynamic pricing, and personalized customer engagement.