Guararapes Confecções (RIAA3) Q4 2025 earnings summary

Executive summary

• Achieved record consolidated EBITDA of R$1.8 billion and net income of R$512 million in 2025, more than double the previous year, driven by disciplined execution, efficiency, and strong performance in both retail and financial services.

• Sale of Midway Mall for R$1.6 billion in December 2025, aligning with a strategy to focus on core business, improve capital structure, and enable record dividend distribution.

• Transformation initiatives included new leadership, strategic board creation, operational improvements, and rebranding, resulting in significant inventory reduction, cash generation, and lower leverage.

• 21 new store openings in 2025, ending the year with 445 stores and robust apparel SSS growth of 10.3%, supported by digital channel acceleration.

• Focused on five strategic pillars: experience, footprint, fashion efficiency, financial services, and capital structure optimization.

Financial highlights

• Consolidated net revenue reached R$10.5 billion in 2025, up 9.0% year-over-year; 4Q25 net revenue was R$3.2 billion, up 5.9% year-over-year.

• Adjusted consolidated EBITDA grew 18.1% to R$1.8 billion, with margin rising to 16.7% (+1.3 p.p.); 4Q25 EBITDA margin was 20.6%, highest in five years.

• Net income (comparable basis) was R$512 million, up 117.8% year-over-year; 4Q25 net income was R$322 million, up 28.8% year-over-year.

• Gross margin improved to 60.8% (+1.8 p.p.), with apparel gross margin at 56.7% (+2.4 p.p.), the highest in seven years.

• CAPEX totaled R$571.8 million, representing 5.4% of net revenue, focused on technology, store expansion, and logistics.

Outlook and guidance

• Strategic focus on maximizing value per square meter, leveraging strong brand, integrated supply chain, and financial services, with confidence in pillars for sustainable and profitable growth.

• Plan to open 15–21 new stores per year, targeting regions with high productivity and lower penetration.

• Continued investment in digital, omni-channel, store footprint, and operational efficiency to drive incremental same-store sales growth.

• Ongoing growth in financial services, with new products and conservative credit policies.