C&A Modas (CEAB3) Q1 2025 earnings summary

Executive summary

• Achieved 15% same-store sales growth in apparel, with net revenue up 41.2% over two years and strong digital expansion; NPS improved by 13.3 p.p. year-over-year.

• Beauty segment net revenue surged 71.1% year-over-year, now nearly half of the electronics and beauty segment, offsetting lower electronics sales.

• Merchandise gross margin expanded by 1.9 p.p. to 52.5%, driven by product mix and higher-margin beauty sales.

• Adjusted EBITDA margin rose to 15.2%, up 2.7 p.p. year-over-year, with adjusted net income of R$2.5 million, reversing a prior loss.

• Free cash generation reached R$80.9 million, and leverage reduced to 0.5x net debt/EBITDA, down from 1.5x year-over-year.

Financial highlights

• Consolidated net revenue was R$1,612.1 million, up 10.9% year-over-year; apparel net revenue was R$1,364.1 million, up 15.5% year-over-year.

• Beauty net revenue surged 71.1% year-over-year; electronics and beauty gross margin increased to 32.8%.

• Adjusted EBITDA (post-IFRS16) was R$244.5 million, up 35.4% year-over-year, with margin at 15.2%.

• Adjusted net income was R$2.5 million, reversing a loss in the prior year.

• CapEx for the quarter was R$40.4 million, up 19.8% year-over-year.

Outlook and guidance

• Plans to open 5–10 new stores in 2025, with a focus on quality locations and sales per square meter; expansion cycle expected to accelerate in 2026.

• Continued focus on commercial planning, product innovation, and omnichannel integration to drive growth.

• Ongoing investments in store renovations, new store concepts, and digital technology.

• C&A Energy strategy execution is at 40–45% completion, with significant value still to be captured.

• Conservative credit granting to continue, with potential for higher C&A Pay penetration if macro conditions improve.