Lojas Quero-Quero (LJQQ3) Q1 2025 earnings summary

Executive summary

• Revenue grew 14.4% year-over-year in Q1 2025 to BRL 765 million, with retail sales up 15.7% and same-store sales up 12.5%.

• Operates 576 stores as of March 2025, with eight new stores opened and five closed in Q1, focusing on small and medium cities.

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

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

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

Financial highlights

• Gross profit increased 7.6% year-over-year to BRL 222 million, while EBITDA rose 20% and adjusted EBITDA reached BRL 13.1 million.

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

• Adjusted net debt stood at BRL 332.5 million, with leverage at 1.8x LTM EBITDA.

• Credit portfolio grew 17%, with default rates stable at 10.8%.

• Investments totaled BRL 12.3 million in Q1, mainly for new stores and IT.

Outlook and guidance

• Q2 is expected to be challenging due to the absence of one-time promotional boosts and higher SELIC rates.

• Store expansion will continue conservatively, with plans to open 20-30 stores in 2025 and mapped potential in over 900 cities.

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

• Management expects retail recovery to continue through 2025, supported by market stabilization and expansion in underpenetrated regions.