Empreendimentos Pague Menos (PGMN3) Q1 2025 earnings summary

Executive summary

• Achieved record gross revenue of R$3.62 billion in 1Q25, up 17.1% year-over-year, driven by strong same-store sales growth and digital channel expansion.

• Adjusted EBITDA rose 55.2% to R$150.3 million, with margin up 1 percentage point to 4.1%, reflecting operational leverage and cost control.

• Adjusted net income reached R$13.1 million, reversing a loss in 1Q24, with margin improvement of 1.1 p.p.

• Market share increased to 6.5% nationally, with gains in all regions and six consecutive quarters of share growth.

• Digital channels revenue rose 53.6% to R$639 million, now 17.6% of total sales.

Financial highlights

• Gross profit reached R$1,041.1 million, with margin at 28.7% of gross revenue, down 0.5 p.p. year-over-year.

• Operating cash flow (LTM) hit a record R$487 million, up 16% year-over-year.

• Net debt/Adjusted EBITDA improved to 1.9x from 2.8x in 1Q24.

• Capex reached R$27.6 million, up 129% year-over-year, mainly for expansion and store refurbishments.

• Cash operating cycle reduced to 50 days, 10 days shorter year-over-year, with significant inventory reduction.

Outlook and guidance

• Minimum of 50 new store openings projected for 2025, with 7 opened in 1Q25.

• Continued focus on operational efficiency, digital channel growth, and market share expansion.

• Ongoing deleveraging and working capital improvements expected to support future profitability.

• Strategic plan execution and integration of Extrafarma expected to drive further gains.