Companhia Brasileira de Distribuicao (PCAR3) Q2 2026 earnings summary

Executive summary

• Transformation and efficiency plans focused on profitability, cost reduction, and financial discipline, with a simplified, customer-centric structure and operational excellence.

• Strategic initiatives included structure redesign, efficiency programs, and expansion of complementary channels, with teams committed to executing the strategy.

• Out-of-court restructuring plan executed to address short-term debt, restore financial flexibility, and extend debt maturities, with over 97% creditor adherence and court approval pending.

• Sales declined due to supply disruptions, strategic adjustments, and discontinuation of the Aliados format, but operational recovery began in June, aided by the FIFA World Cup.

• Efficiency plans delivered over half of annual cost and Capex reduction targets in the first half, supporting cash preservation.

Financial highlights

• Gross revenue for Q2 2026 was R$4.7 billion, down 7% year-over-year, mainly due to supply disruptions and restructuring impacts.

• Gross margin expanded to 30.5%, up 3.1 percentage points year-over-year, driven by profitability actions, tax regime changes, and a higher-margin sales mix.

• Adjusted EBITDA margin reached 10.6%, an increase of 1.7 percentage points year-over-year, with adjusted EBITDA at R$450 million, up 7.3%.

• Net loss from continuing operations was R$204 million, up 15.5% year-over-year, but excluding prior year’s tax litigation gain, net loss improved 28.5%.

• Capex for 1H26 was R$162 million, a 55% reduction year-over-year, with Q2 Capex at R$76 million.

Outlook and guidance

• Focus remains on sustainable sales growth, profitability, cash generation, and disciplined capital allocation, with Capex for 2026 guided between R$300–350 million.

• Efficiency plan targets a R$415 million reduction in operating expenses for 2026, with R$244 million (58.9%) achieved in 1H26.

• Restructuring plan, pending court approval, expected to extend debt maturities, reduce funding costs, and improve liquidity.