Companhia Brasileira de Distribuicao (PCAR3) Q2 2025 earnings summary

Executive summary

• Q2 2025 saw a challenging consumer environment with high interest rates and food inflation, but operational adjustments and cost control drove resilience and efficiency gains.

• Same-store sales grew 5.1%, with premium segment up 6.5%, proximity format sales up 16.8%, and e-commerce sales rising 16.4% to 13% of total sales.

• Market share gains were achieved in premium (+1.1pp) and proximity (+0.8pp) segments, supported by store refurbishments and loyalty initiatives.

• Net loss from continuing operations improved by 35.5% year-over-year in Q2 2025, with consolidated net loss down 34.9%.

• ESG initiatives advanced, including reduced greenhouse gas emissions, diversity awards, and hiring of refugees and immigrants.

Financial highlights

• Gross profit was R$1.3 billion with a margin of 27.4% (down 0.8pp year-over-year).

• Adjusted EBITDA reached R$420 million, up 6.1% year-over-year, with a margin of 9.0% (+0.2pp), driven by SG&A efficiency.

• SG&A expenses reduced to 19.4% of net revenue, a 1.0pp improvement year-over-year.

• Operating cash flow (LTM) was R$1.1 billion, up 8.3% year-over-year; free cash flow from operations (LTM) increased 22.6% to R$383 million.

• Net financial expenses (post-IFRS 16) were R$304 million, 6.5% of net revenue.

Outlook and guidance

• Store openings will slow in H2 2025 and 2026 due to macroeconomic challenges and significant progress in expansion.

• CapEx and other cash-consuming expenses are expected to decrease, with a focus on deleveraging and operational improvements.

• Management expects price stability in key categories and continued resilience in premium segments, with ongoing ESG and sustainability targets.