Companhia Brasileira de Distribuicao (PCAR3) Q2 2026 earnings summary

Executive summary

• Transformation and efficiency plans focused on profitability, cost reduction, and financial discipline, with structure simplification and a client-centric culture.

• Strategic initiatives included operational/commercial efficiency, complementary channel expansion, and execution of cultural change.

• Adjusted EBITDA margin expanded by 1.7 p.p. year-over-year, reflecting efficiency initiatives and cost discipline.

• Pro forma net debt reduced by 68% to R$1.2 billion, with net leverage dropping from 3.9x to 1.3x after the out-of-court restructuring plan.

• Sales declined 7% year-over-year, mainly due to restructuring impacts and format discontinuation, but operational recovery began in June.

Financial highlights

• Gross revenue for 2Q26 was R$4.7 billion, down 7.0% year-over-year; net revenue fell 9.6%.

• Adjusted EBITDA grew 7.3% year-over-year to R$450 million, with margin up 1.7 p.p. to 10.6%.

• Gross margin expanded to 30.5%, up 3.1 p.p. year-over-year, driven by tax regime changes and margin prioritization.

• Net loss from continuing operations was R$204 million, up 15.5% year-over-year, but excluding prior tax litigation gain, net loss improved 28.5%.

• Capex for 1H26 was R$162 million, a 55% reduction year-over-year.

Outlook and guidance

• Capex for 2026 guided between R$300–350 million, with 1H26 investments at R$162 million, 54% of the lower range.

• Efficiency plan targets a R$415 million reduction in operating expenses; R$244 million (58.9%) achieved in 1H26.

• Restructuring plan, pending court approval, expected to extend debt maturities, reduce funding costs, and improve liquidity.

• Focus remains on sustainable sales growth, profitability, cash generation, and disciplined capital allocation.

• No significant improvement in the macroeconomic environment is expected in the short term; adaptation and value proposition are key.