Vivara Participações (VIVA3) Q2 2025 earnings summary

Executive summary

• Gross revenue increased 15.9% year-over-year, driven by 11% same store sales growth, new store openings, and strong digital and Life store performance.

• Gross margin expanded to 72.3%, up 347–350 bps year-over-year, supported by pricing, product mix, and increased domestic production.

• Adjusted EBITDA margin reached up to 26.9%, reflecting operational leverage and disciplined SG&A control.

• Operational cash generation was R$169.1 million, with free cash flow of R$152.5 million, aided by early receipt of credit card receivables.

• New distribution center in Espírito Santo began operations, expected to enhance logistics, cost efficiency, and provide tax credits.

Financial highlights

• Gross revenue reached R$969.7 million (+15.9% YoY); net revenue was R$761.0 million (+16.0% YoY).

• Adjusted EBITDA was R$204.6 million (+24.7% YoY); adjusted EBITDA margin at 25.5–26.9%.

• Net income for 2Q25 was R$151.1 million; excluding non-recurring tax credits, net income grew 14.3% YoY.

• CAPEX was R$16.7 million, down 56.3% YoY, due to IT expense reclassification and fewer store openings.

• Inventory days reduced by 21 days QoQ, reflecting effective optimization measures.

Outlook and guidance

• Confident start to 2H25 with robust product launches, optimized assortment, and strong preparation for key retail seasons.

• Focus on price management, cost optimization, and mix improvement, especially in higher-margin subcategories.

• Disciplined expense and CAPEX management, with initiatives to strengthen EBITDA-to-cash conversion.

• 100% of 2025 store opening pipeline contracted or under negotiation, supporting guidance of 40–50 new stores, with Life stores as the main growth driver.

• Espírito Santo distribution center expected to reach full operational potential in 2H25, optimizing logistics and tax benefits.