Dimed (PNVL3) Q2 2025 earnings summary

Executive summary

• Retail gross revenue grew 19.6% year-over-year in Q2 2025 to R$1.41 billion, with strong digital and private label performance, and adjusted EBITDA rose 42.9% to R$70.1 million.

• Adjusted net income increased 39.5% year-over-year to R$28.0 million, with margin at 2.0%.

• Opened 14 new stores in Q2 2025, totaling 649 units, and 58 new stores in the last 12 months, with market share gains for the 21st consecutive quarter in the South.

• Digital sales accounted for 24.4% of retail revenue, with app sales up 51.3% year-over-year and 6.9 million monthly active users.

• Achieved strong sales and earnings growth despite a challenging comparison base due to 2Q24 floods in Rio Grande do Sul.

Financial highlights

• Retail gross margin reached 30.4% (+0.3 p.p. YoY), with consolidated gross margin at 30.7%.

• Free cash flow generation was R$33.8 million, and the cash conversion cycle improved by 8 days year-over-year to 71 days.

• Net debt/Adjusted LTM EBITDA stood at 1.1x, reflecting a solid capital structure and low leverage.

• Retail EBITDA margin reached 11.1%, up 0.5 p.p. year-over-year.

• Average sales per store reached R$724,000, with mature stores at R$785,000.

Outlook and guidance

• Continued focus on digital transformation, store expansion, and private label growth, with positive sales trends and double-digit growth expected.

• GLP-1 category expected to expand further with generics in 2026, improving both sales and gross margins.

• Hygiene, beauty, and medication categories projected to maintain strong growth into 2025 and 2026.

• Management is evaluating impacts of new accounting standards and Brazilian tax reform.

• Expense dilution expected to become clearer as wholesale is removed from comparisons.