Lojas Quero-Quero (LJQQ3) Q1 2025 earnings summary

Executive summary

• Gross revenue grew 14.4% year-over-year to R$764.8 million in Q1 2025, with retail sales up 15.7% and same-store sales up 12.5%.

• Eight new stores were opened, bringing the total to 576, with expansion focused on Paraná and underpenetrated regions.

• Net income was a loss of R$31.1 million, impacted by higher costs, non-recurring tax items, and increased financial expenses.

• Digital sales accounted for 26% of total sales, supporting inventory optimization.

• Maintains a differentiated business model combining retail and financial services, with a strong digital financial platform.

Financial highlights

• Net operating revenue increased 14.1% year-over-year to R$671.5 million.

• Gross profit grew 7.6% to R$222.0 million; gross margin declined 2.0 p.p. to 33.1% of net revenue.

• Adjusted EBITDA rose 19.8% to R$13.1 million; EBITDA margin dropped to 6.4% due to lower non-recurring tax credits and higher costs.

• Adjusted net loss was R$15.7 million, with adjusted net margin at -2.3%.

• Net debt at R$332.5 million; cash and equivalents at quarter-end were R$169.0 million.

Outlook and guidance

• Management expects continued gradual recovery in retail, with a more active market after two years of contraction.

• Guidance for 2025 is 20 to 30 new store openings, with conservative expansion focused on profitability and cash flow.

• Margin recovery is anticipated as promotional sales normalize, but overall market conditions remain tough.