Empreendimentos Pague Menos (PGMN3) Q2 2025 earnings summary

Executive summary

• Achieved record-breaking results and sixth consecutive quarter of growth acceleration, with same-store sales up 18.1% year-over-year and consistent market share gains in all regions, especially the North and Northeast.

• National market share reached a record 6.6%, with strong omnichannel and digital expansion; digital channels accounted for 18.7% of gross revenues, up over 50% year-over-year.

• Adjusted EBITDA rose 37.9% to BRL 244 million (6.1% margin), and adjusted net income increased 36.2% to BRL 60.2 million.

• Operational efficiency, customer service, and employee engagement drove robust sales and profitability improvements.

• Digital and omnichannel strategies are key differentiators, with app sales up 124% year-over-year.

Financial highlights

• Gross revenues reached R$3.98 billion in 2Q25, up 18% year-over-year, with balanced growth in customer base, frequency, and average ticket.

• Gross profit was R$1.22 billion, up 19.2% year-over-year, with gross margin at 30.7% (+0.3 p.p.).

• Net income rose 36% to BRL 60 million, with over BRL 200 million accumulated in the last 12 months.

• Working capital cycle improved by 3 days year-over-year, mainly through better stock management; cash cycle reduced to 53 days.

• Operating cash flow for 2Q25 was R$61.5 million, with R$310.5 million over the last twelve months.

Outlook and guidance

• Management remains optimistic about continued growth, especially in digital and chronic care segments, but refrains from providing formal guidance.

• Expects further productivity gains from store conversions and digital expansion, with ongoing investments in store openings, renovations, and digital channels.

• Anticipates positive impact from upcoming patent expirations in GLP-1 inhibitors, broadening access and category growth.

• Management expects continued operational evolution and financial deleveraging to support higher net profitability.