#Brazil #Q3 2025 #Earnings Results #Lojas Renner #Porto Alegre

Lojas Renner's Q3 2025 Earnings Results

In a recent announcement, Lojas Renner S.A. released its earnings results for the third quarter of 2025 (Q3 2025). Despite facing challenging market conditions, the company demonstrated resilience with solid growth across various financial metrics. All amounts are provided in millions of Reais, and comparisons are made to the previous year's figures unless otherwise noted.

Key Highlights

• - Apparel Sales Growth: The company experienced a 4.7% increase in apparel sales, alongside a 3.3% rise in same-store sales (SSS), reaching a gross margin of 56.2%, an increase of 0.5 percentage points.
• - Overall Retail Margin Improvement: The retail gross margin also saw a rise of 0.4 percentage points, reaching 55.1%.
• - Adjusted EBITDA: Lojas Renner's adjusted EBITDA stood at R$ 593.8 million, reflecting a 2.9% increase with a margin of 19.3%.
• - Robust Cash Position: The company boasts a cash position of R$ 1.6 billion, with a net cash position of R$ 1.3 billion.
• - Free Cash Flow Generation: Lojas Renner generated R$ 473.1 million in free cash flow during this quarter.
• - Share Buyback Program: Approximately 85% of the buyback program has been executed so far, involving around 64 million shares for a total of R$ 860 million.
• - Net Profit Increase: The net profit for the quarter reached R$ 279.4 million, a rise of 9.4%, leading to an earnings per share of R$ 0.2803, up by 15.5%.
• - Return on Invested Capital (ROIC): The company experienced continuous improvement in ROIC (Last Twelve Months), reaching 14.4%, a notable increase of 1.7 percentage points compared to prior figures.

Insights from the CEO

Fabio Faccio, the CEO of Lojas Renner, emphasized that the company's ongoing initiatives to enhance its business model are yielding tangible results. While the third quarter posed challenges distinct from those experienced in 2024, he remains optimistic about the company's strategic trajectory.

The CEO noted that autumn temperatures impacted sales in the previous quarter, limiting the availability of winter items moving into Q3. Consequently, Lojas Renner opted against placing additional orders, which had a temporary negative impact of approximately 2 to 3 percentage points on sales. However, he assured stakeholders that the company has established a more structured process for monitoring and decision-making to mitigate future risks of missed sales opportunities.

Sales growth throughout the period remained strong, with retail sales increasing by 4.2% and apparel specifically by 4.7%. Collectively, the average growth for the second and third quarters reached 11.5%, with apparel growing at 12.5%. Year-on-year comparisons for the first nine months of the year exhibit an impressive growth of 11.6%, and 12.8% for apparel, alongside noticeable market share gains.

Operational Investments and Future Outlook

Lojas Renner's commitment to profitable growth is reflected in its efforts to streamline operational expenses following extensive CAPEX and OPEX investments. While certain operational costs saw a short-term increase beyond sales growth this quarter, this is not indicative of a long-term trend. The company anticipates consistent improvement in expense efficiency, a result of previous investments aimed at increasing sales volume and optimizing cost structures.

The Realize CFI program, key to customer engagement and loyalty, reported its eighth consecutive quarter of growth, up by 37%, affirming the quality of its credit portfolio. Lojas Renner's digital sales channel has expanded and now accounts for 17% of total sales, bolstered by past investments allowing for scalable growth within this sector without compromising profitability.

The company has also expanded its footprint by opening 18 new stores this year, with a goal of 30 to 37 by year's end. Renovations of existing stores continue, with improvements to the digital and omnichannel experience enhancing customer satisfaction and expanding the active customer base.

Lojas Renner finished Q3 with a robust net cash position of R$ 1.3 billion, allowing for flexibility in pursuing strategic investments and navigating potential market adversities. The company has delivered R$ 1.4 billion directly to shareholders through interest on equity and active share repurchases, demonstrating its commitment to maximizing shareholder value.

In summary, Lojas Renner remains dedicated to realizing its business model's full potential while maintaining sustainable, profitable growth for the long term.

For a complete overview of Lojas Renner’s financial results, please visit Lojas Renner Investor Relations.

Earnings Conference Call
Date: November 7, 2025
Time: 10:00 AM BRT / 8:00 AM ET
(Conducted in Portuguese with simultaneous English translation.)