C&A Modas (CEAB3) Q2 2025 earnings summary

Executive summary

• Achieved 17% same-store sales growth in apparel for 2Q25, with strong performance in Women's and ACE categories and gross merchandise margin expanding by nearly 2 percentage points year-over-year.

• Adjusted net income rose 113.2% year-over-year to BRL 124.7 million, with margin nearly doubling from 2Q24.

• Record adjusted free cash generation reached BRL 185 million, and net debt/EBITDA improved to 0.3x, the lowest since IPO.

• ROIC for the last twelve months was 20.4%.

• Continued strong brand engagement, with NPS up over 10 percentage points and successful marketing campaigns.

Financial highlights

• Apparel net revenue grew almost 33% over two years, with gross margin up nearly 2 percentage points; Beauty net revenue increased 64% year-over-year.

• Gross merchandise margin increased by 1.9 percentage points to 56.3% year-over-year.

• Adjusted EBITDA (pre-IFRS 16) reached BRL 426 million, with a 2.1 percentage point margin expansion.

• Investments totaled BRL 111 million in 2Q25, up 94% year-over-year, mainly for store renovations and technology.

• Cash position at quarter-end was BRL 1 billion, with a 73% reduction in net debt.

Outlook and guidance

• Plans to accelerate investments in store renovations and new openings, targeting 20 renovations in 2025 and 30 in 2026.

• Aims to open at least five more stores in 2025 and 15-20 in 2026, focusing on shopping malls.

• Logistics strategy to implement four urban hubs and one main distribution center by 2027, with BRL 200-250 million CapEx.

• C&A Pay penetration expected to reach 30-35% in the medium term, with focus on customer experience and risk management.

• Continued investment in digital transformation, store renovations, and expansion of the product assortment.