Guararapes Confecções (RIAA3) Q2 2025 earnings summary

Executive summary

• Achieved record net income of R$143 million in 2Q25, up 151.2% year-over-year, with consolidated EBITDA reaching R$436 million, a 21.1% increase from 2Q24, and strong operational performance across all segments.

• Apparel same-store sales grew 15.8%, marking the eighth consecutive quarter of SSS growth and the seventh of gross margin expansion in retail and apparel.

• Transformation initiatives included a new CEO, strategic priorities, and creation of new business boards, driving efficiency and growth.

• Focused on sustainable fashion, technology investments, and employment generation, reinforcing market leadership.

• Continued deleveraging, with net debt/EBITDA at 0.5x, reflecting robust financial discipline.

Financial highlights

• Consolidated net revenue rose 13.9% to R$2.6 billion in 2Q25; gross profit increased 17.4% to R$1.6 billion, with gross margin up 1.9 p.p. to 60.8%.

• Net income reached R$143 million, 2.5 times higher than 2Q24, with net margin improving to 5.4% from 2.5% in 2Q24.

• Consolidated EBITDA was R$436 million, up 21.1% year-over-year, with margin at 16.5%, the highest in seven years.

• Retail EBITDA margin improved to 15.2%, up 0.8 p.p. year-over-year.

• Free cash flow in 2Q25 was R$145 million, reflecting improved operational performance.

Outlook and guidance

• Management remains confident in capturing further value through integrated business model and strategic pillars: Experience, Efficiency, and Return on Capital.

• Continued focus on sustainable growth, digital transformation, and operational excellence.

• Continued investment in technology, store expansion, and sustainable fashion initiatives.