C&A Modas (CEAB3) Q3 2025 earnings summary

Executive summary

• Net revenue grew 8.9% year-over-year, with apparel net revenue up 8.9% and same-store sales rising 8.1%; beauty category net revenue surged 50.9%, while electronics revenue declined due to the phase-out of smartphones.

• Adjusted net income increased 41.7% to BRL 73.6 million, with margin expansion of 1.1 percentage points and pre-IFRS 16 EBITDA margin rising to 10.9%.

• Free cash flow reached nearly BRL 243 million, with a nine-day improvement in the cash conversion cycle and net debt-to-EBITDA ratio reduced to 0.1x.

• ROIC reached 21.7% for the quarter, reflecting strong operational execution.

• Net profit for the nine months ended September 30, 2025, was R$273.9 million, up from R$197.5 million in the prior year.

Financial highlights

• Merchandise gross margin improved by 1.9 percentage points to 54.6%, with apparel gross margin up 0.3 percentage points year-over-year.

• Adjusted EBITDA reached BRL 209 million, up 4.5% year-over-year, with a 0.2 percentage point margin expansion.

• Capex totaled BRL 146 million, up nearly 80% year-over-year, with 81.7% allocated to Energia projects.

• Consolidated cash and cash equivalents decreased to R$907.3 million, mainly due to the settlement of R$650.6 million owed to Bradesco for the repurchase of financial services rights.

• Loans and debentures totaled R$1.25 billion at September 30, 2025, down from R$1.5 billion at year-end 2024.

Outlook and guidance

• Management remains optimistic for Q4, citing fresh inventories, agility in assortment, and continued rollout of the Energia store model, with initial results exceeding expectations.

• Beauty and non-seasonal categories are expected to continue driving growth, with further expansion and innovation planned.

• Store expansion is set to accelerate in 2026, with an even more ambitious plan than 2025.

• Focus on dynamic assortment, CRM, and AI-powered features for digital channels in 2025.

• Management confirmed the going concern assumption and does not foresee material uncertainties affecting future operations.