Lojas Renner (LREN3) Q2 2025 earnings summary

Executive summary

• Achieved strong growth in Q2 2025, with apparel sales up 20% year-over-year, SSS up 18.6%, and digital GMV up 20.7%, driven by strategic initiatives and operational efficiency.

• Net income increased 28.4% to R$404.5 million, EPS rose 34.4%, and ROIC LTM reached 14.1% (+2.0p.p.), reflecting improved profitability and share buybacks (70% executed).

• Free cash flow reached R$333.1 million, and net cash position stood at R$1.2 billion after significant share buybacks.

• Recognized as the first global retailer to adopt IFRS Sustainability Disclosure Standards (S1 and S2), reinforcing sustainability leadership.

• Digital and omni-channel engagement expanded the active customer base and improved profitability.

Financial highlights

• Retailing net revenue grew 18.5% year-over-year to R$3,649.7 million; apparel gross margin reached 58.4% (+0.9p.p.).

• Adjusted EBITDA reached R$891.0 million (+32.9%), margin at 24.4% (+2.6p.p.); net income for the period was R$404.5 million (+28.4%), net margin at 11.1% (+0.9p.p.).

• Earnings per share increased to R$0.4024 (+34.4%) following share buybacks.

• Free cash flow of R$333.1 million; financial cycle reduced by 12 days.

• Cash position at quarter-end was R$1.8 billion, with net cash of R$1.2 billion.

Outlook and guidance

• Plans to invest R$850 million in 2025, mainly in store refurbishments, new store openings (30–37 units), and technology, with most openings in 2H25.

• Price adjustments for the second half of the year are expected to be close to inflation.

• Anticipate healthy sales growth in H2, though not at the same pace as H1, due to a stronger comparison base and macroeconomic challenges.

• Gross margin expected to remain positive, supported by hedged import orders and efficiency gains, but not at H1 levels.

• Cautious credit origination to continue until macroeconomic conditions improve, with potential for more aggressive growth in 2025.