Guararapes Confecções (RIAA3) Q2 2026 earnings summary

Executive summary

• Achieved record consolidated EBITDA of R$ 461 million (+12.7% YoY) and net income of R$ 168 million (+36.2% YoY), both highest ever for a second quarter, reflecting operational efficiency, product mix optimization, and transformation initiatives.

• Apparel SSS grew 7.8%, marking the 12th consecutive quarter of growth; gross margin reached 59.2%, the highest 2Q margin in company history.

• Transformation included new leadership, strategic board creation, inventory reduction, store modernization, and expansion, with over 20 stores to feature the new concept by year-end.

• Financial Services EBITDA rose 7.2% YoY to R$ 119 million, with disciplined lending and portfolio quality.

• Maintained strategic focus on experience, fashion efficiency, capital structure, and the evolution of Midway Financeira.

Financial highlights

• Consolidated net revenue: R$ 2.69 billion in 2Q26 (+3.3% YoY); gross profit: R$ 1.70 billion (+8.5% YoY); gross margin: 63.3% (+3.0 p.p. YoY).

• Retail EBITDA: R$ 342 million (+14.7% YoY), margin 17.0% (+1.8 p.p. YoY); Financial Services EBITDA: R$ 119 million (+7.2% YoY).

• Net income: R$ 168 million in 2Q26 (+36.2% YoY), margin 6.2% (+1.5 p.p. YoY); EPS reached R$ 0.33 (+13.8% YoY).

• CAPEX totaled R$ 156 million (+31.1% YoY), focused on logistics automation and store renovations.

• LTM net income surpassed BRL 530 million, exceeding last year’s total.

Outlook and guidance

• Continued focus on expanding and modernizing the store network, with over 20 stores to feature the new concept by year-end.

• Ongoing investment in technology, logistics, automation, and digital channels to drive growth and efficiency, with benefits from DC upgrades expected by late 2027 or early 2028.

• Expect continued margin expansion and operational improvements, though at a more moderate pace as many levers have already been captured.