Dimed (PNVL3) Q1 2025 earnings summary

Executive summary

• Retail gross revenue reached R$1.35 billion in Q1 2025, up 15.9% year-over-year, with strong SSS growth of 11.8% and MSS of 9.8%, and digital channels contributing 22.5% of sales.

• Mature store sales rose 9.8% year-over-year, and private label products grew 25.1%, now accounting for 7.8% of sales.

• Market share in the South region increased for the 20th consecutive quarter, reaching 12.8%, with gains in all states and strong performance in Santa Catarina.

• Transitioned to a retail-only model after discontinuing wholesale operations, focusing on store productivity and expansion.

• Free cash flow was positive at R$14.4 million, reversing the usual Q1 cash burn trend.

Financial highlights

• Retail gross margin held steady at 29.4%, supported by pricing discipline, private label and OTC growth, and effective supplier negotiations.

• Adjusted EBITDA was R$64.6 million (4.8% margin), up 7.2% year-over-year, with margin expansion of 0.2 p.p.

• Adjusted net income reached R$27.8 million (2.1% margin), with positive impact from lower financial expenses and prior asset sales.

• Administrative and selling expenses grew below retail sales, supporting margin expansion.

• Net debt/EBITDA ratio at 1.2x, with debt cost below CDI (CDI -1.1%).

Outlook and guidance

• Expects continued robust sales and margin performance, with stable expenses and further productivity gains as wholesale base adjustments phase out.

• Focus on expansion in the southern region and São Paulo, targeting both higher-income and mass-market segments.

• Anticipates further growth in private label share, digital transformation, and service offerings, especially in preventive health.

• Strategic investments in technology and omnichannel initiatives to drive operational efficiency and customer loyalty.