Vivara Participações (VIVA3) Q4 2025 earnings summary

Executive summary

• Maintains a significant gold stock, providing flexibility in price positioning and production planning, with eight months of gold inventory and a strategy to reduce this by half over time.

• Achieved record gross revenue growth of 17.5% YoY in 4Q25 and 16.2% YoY for 2025, driven by strong digital sales, same store sales increases, and Life brand expansion.

• Opened 41 new stores in 2025, mainly Life stores, with guidance for 55–65 new stores in 2026.

• Focuses on internal initiatives such as product engineering, lighter product design, and increased in-house production to offset commodity price increases and maintain profitability.

• Strong emphasis on cash generation, inventory optimization, and efficient capital allocation, resulting in a 58.4% reduction in net debt and improved working capital.

Financial highlights

• Gross revenue reached R$3,801.3 million in 2025 (+16.2% YoY), with a CAGR of 18.2% over four years.

• Same store sales grew 11.8% in 2025; digital sales up 19.5% for the year and 31.5% in 4Q25.

• Adjusted EBITDA margin expanded to 27.8% in 4Q25; adjusted net income margin at 24.9% in 4Q25.

• Inventory optimization initiatives reduced inventory days by 35, freeing R$89.6 million and supporting strong operating cash generation.

• Net debt/Adjusted EBITDA reduced to 0.2x by year-end 2025.

Outlook and guidance

• Plans to gradually reduce inventory coverage to historical levels (400-450 days) over the next 12-24 months.

• Guidance for 55–65 new store openings in 2026, mainly Life stores, with about half in the Southeast region.

• Focus on SSS growth, digital sales expansion, and inventory optimization to sustain profitability.

• Expects continued price adjustments throughout the year, especially in response to commodity price movements.

• Marketing expenses expected to stabilize at around 4.5% of net revenue, with increased store openings in 2026 likely to pressure sales force expenses.