Companhia Brasileira de Distribuicao (PCAR3) Q1 2025 earnings summary

Executive summary

• Q1 2025 marked the start of a new strategic cycle (2025–2027) focused on sales, customers, digital, expansion, profitability, and ESG, with strong progress in sales, margin, and volume despite a volatile macroeconomic environment.

• Achieved 4.6% gross revenue growth and 3.9% net revenue growth year-over-year, with market share gains, especially in premium and proximity formats.

• Adjusted EBITDA grew 9.9% year-over-year to R$409 million, with margin expansion to 8.6% (+0.5 p.p.), driven by operational improvements and cost control initiatives.

• Net loss from continuing operations reduced by 77% to R$93 million, reflecting improved profitability and lower provisions.

• E-commerce sales rose 16.9% year-over-year, now representing 12.6% of total sales, reinforcing leadership in online food retail.

Financial highlights

• Same-store sales grew 7.3% year-over-year, with Proximity up 7.8%, Extra Mercado up 6.6%, and Pão de Açúcar up 6.5%.

• Gross profit reached R$1.3 billion (27.6% margin), up 0.4 percentage points from Q1 2024.

• Adjusted consolidated EBITDA margin improved to 8.6% (+0.5 p.p.), with pre-IFRS 16 leverage reduced to 2.8x from 3.0x.

• Net financial expenses post-IFRS 16 were R$318 million, 6.7% of net revenue.

• LTM operating cash generation reached R$1.0 billion, with CAPEX of R$709 million focused on store expansion and renovations.

Outlook and guidance

• Management remains confident in sustaining growth and profitability, with continued focus on premium and proximity formats, digital expansion, and operational efficiency.

• Store expansion plan targets 250 proximity stores by 2026, with rapid ramp-up and above-average profitability in new units.

• Expectation of further reduction in non-recurring expenses, especially from tax settlements and labor claims, supporting improved cash flow.

• Retail media channel projected to grow at high double digits in 2025, with further expansion into new banners and digital channels.

• CapEx planned at 3% of revenue, with maintenance CapEx at R$400–450 million, supporting store refurbishments and expansion.