C&A Modas (CEAB3) Q2 2026 earnings summary

Executive summary

• Net revenue grew 5.6% year-over-year, driven by strong winter collection performance and robust digital expansion, despite a challenging consumer environment and World Cup-related traffic declines.

• Apparel same-store sales rose 4.1% on a high comparable base, and apparel gross margin reached a record 59.1%, up 0.6 p.p. year-over-year.

• Digital net revenue surged 33.3% year-over-year, now representing 7.7%–7.8% of merchandise sales.

• Adjusted net income reached a record R$130.1 million for a second quarter, up 4.3% year-over-year, with adjusted net margin expanding to 6.2%.

• Continued disciplined capital allocation, with ROIC at 19.9%, 85% execution of the share buyback program, and significant investments in store modernization, digital transformation, and new brand launches.

Financial highlights

• Apparel net revenue reached R$1.9 billion, up 5.6% year-over-year.

• Pre-IFRS 16 adjusted EBITDA was R$307 million (14.7% margin); post-IFRS 16 adjusted EBITDA was R$435.9 million (20.9% margin).

• ROIC (LTM 2Q26) at 19.9%, well above the cost of capital.

• Gross debt decreased 26% year-over-year to R$952 million; cash position at R$782 million; net debt to EBITDA ratio at 0.2x.

• Merchandise net revenue increased 1.8%, while financial services revenue declined 8.8% due to the end of the Bradescard partnership.

Outlook and guidance

• Expectation of normalization in inventory days and cash conversion cycle by year-end, with free cash flow projected to align with last year, concentrated in Q4.

• No structural changes planned in pricing strategy; focus remains on value creation and category-by-category price management.

• Continued investment in omni-channel, digital, and store renovations to drive productivity and growth.

• Cautious credit granting for C&A Pay, with focus on recurrence and operational efficiency.

• Management monitoring impacts of tax reform and regulatory changes, with no measurable effects recognized as of June 2026.