This article first appeared on GuruFocus.
Net Revenue: Apparel net revenue reached BRL1.9 billion in Q2 2026, up 5.6% year over year; two-year apparel net revenue growth of 23.9%.
Same-Store Sales: Apparel same-store sales grew 4.1% on top of a 17% comparable base in Q2 2025.
Apparel Gross Margin: Record Q2 apparel gross margin of 59.1%, up 60 basis points year over year; 20th consecutive quarter of expansion.
Digital Net Revenue: Reached BRL154 million, up 33.3% year over year; 10th consecutive quarter of annual expansion; ~7.8% of merchandise sales (up ~2 percentage points).
Adjusted Net Income: BRL130 million in Q2, up 4.3% year over year; new Q2 record; adjusted net margin of 6.2% (up 0.2 percentage points).
Adjusted EBITDA (pre-IFRS 16): BRL307 million, with a margin of 14.7%.
SG&A (pre-IFRS): Up 2.7% year over year, below inflation; G&A down 6.4%; ~0.6 percentage point pressure as % of net revenue, or ~0.8 percentage point dilution when adjusted for comparability effects.
C&A Pay Revenue: BRL93.4 million, up 9.4% year over year; penetration of 28.2% of retail sales (up 0.3 percentage points); portfolio up to 360 days at BRL978 million, up 10.2%; operating income of BRL15.4 million.
Credit Quality: Over 90-day NPL ratio at 13.4%, down 3.7 percentage points year over year; NPL formation at 4% of portfolio; coverage ratio above 113%.
Investments (Capex): ~BRL120 million, up 6.6% year over year.
Working Capital: Cash conversion cycle increased ~19 days year over year, driven by an 18-day increase in inventory days; receivables up 3 days; supplier payment terms up 2 days.
ROIC: ~20% over the last 12 months, above cost of capital.
Net Debt & Leverage: Gross debt of BRL952 million, down 26% year over year; cash position of BRL782 million; net debt to EBITDA ratio of 0.2x.
Share Buyback: ~85% executed; BRL64.3 million repurchased during Q2 2026.
Store Network: 341 stores; 11 more stores versus last year; two new Energia concept stores opened in Santa Catarina; three more Energia openings scheduled for Q3; two renovations completed with 18 underway; first ACE store launched.
Release Date: August 05, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Net revenue increased 5.6% year over year, driven by strong winter collection performance.
Apparel same-store sales grew 4.1% on top of a 17% comparable base, demonstrating resilience.
Record Q2 apparel gross margin of 59.1%, marking the 20th consecutive quarter of expansion.
Digital net revenue surged 33.3% year over year, reaching 7.7% of merchandise sales.
Record adjusted net income of BRL130 million, up 4.3% year over year, with ROIC around 20%.