Empreendimentos Pague Menos (PGMN3) Q1 2025 earnings summary

Executive summary

• Achieved 17.1% year-over-year gross revenue growth in Q1 2025, reaching R$3.6 billion, with same-store sales up 17% and strong digital channel expansion.

• Adjusted EBITDA rose 55.2% to R$150.3 million, with margin up 1 percentage point to 4.1%.

• Net income was R$13.1 million for the quarter, reversing a loss in Q1 2024; LTM net income reached R$188.2 million, up 5x year-over-year.

• Market share increased to 6.5% nationally, with gains in all regions and six consecutive quarters of share growth.

• Digital channels revenue rose 53.6% to R$639 million, now 17.6% of total sales.

Financial highlights

• Gross profit reached R$1,041.1 million, with margin at 28.7% of gross revenue.

• Operating cash flow (LTM) was R$487 million, up 16% year-over-year; cash flow from operations reached R$678.8 million LTM, up 4x year-over-year.

• Net debt/EBITDA improved to 1.9x from 2.8x in Q1 2024.

• G&A expenses at 2.4–2.5% of revenue, the lowest in five years.

• Inventory turnover improved, with a 9-day reduction in inventory and a 10-day improvement in the cash cycle.

Outlook and guidance

• Management remains optimistic, targeting further acceleration in growth, operational improvements, and digital expansion.

• Plans to open 50 new stores in 2025, with a lower investment level to prioritize deleveraging.

• Focus on reducing leverage further by year-end, with no specific guidance on the final level.

• Strategic plan execution and integration of Extrafarma expected to drive further gains.