Uniao Pet Participacoes (AUAU3) Q1 2025 earnings summary

Executive summary

• B2C sales grew 9.0% year-over-year in Q1 2025, with inflation near 0%, indicating real growth in volume and transactions; same-store sales increased 6.0% year-over-year.

• Physical stores grew 10.2% and digital channels 8.0% year-over-year, with digital penetration stabilizing at 40-45% of total sales.

• Private label sales surged 31% year-over-year, reaching 11.3% of total sales in Q1 and over 12% in Q2; subscriber base grew 19-20% year-over-year, now representing 29-30% of revenue.

• Launched "Seres Saúde" pet health plan and expanded Clubz loyalty program, driving higher customer engagement and basket size.

• Temporary operational inefficiencies at the distribution center impacted EBITDA margin but were resolved by quarter-end.

Financial highlights

• Gross revenue reached R$1.01 billion, up 7.9% year-over-year, with B2C sales at R$947.5 million (+9.0%) and B2B at R$28.2 million (-24.7%).

• Gross profit was R$392.0 million (+7.7% year-over-year), with a stable gross margin of 38.9%.

• Adjusted EBITDA was R$56.0 million, margin at 5.6% (-0.9 p.p. year-over-year), impacted by higher operational expenses and one-off logistics costs.

• Net profit was R$759-800 thousand, impacted by R$9 million in non-recurring transaction expenses and a positive R$8.6 million FX swap effect.

• Operating cash flow was R$23.3 million; CapEx and investments fell 14.4% year-over-year, with new store investments down 55.4%.

Outlook and guidance

• Management expects continued sales growth, operational leverage, and disciplined expense and cash management for 2025.

• Price adjustments from suppliers in Q2 are expected to help offset cost inflation and improve margins.

• Clubz benefits club rollout to physical stores and the Seres Saúde health plan are expected to drive further engagement and revenue.

• Normalization of distribution center operations and inventory levels anticipated to support margin recovery in coming quarters.