Guararapes Confecções (RIAA3) Q2 2026 earnings summary

Executive summary

• Achieved record consolidated EBITDA of R$ 461 million (+12.7% YoY) and net income of R$ 168 million (+36.2% YoY), both highest ever for a second quarter, reflecting the success of a multi-year transformation focused on operational efficiency, product mix, and customer experience.

• Apparel SSS grew 7.8%, marking the 12th consecutive quarter of growth; gross margin reached 59.2%, the highest 2Q margin in company history.

• Transformation initiatives included new leadership, strategic board creation, inventory reduction, and store modernization, with continued store expansion and renovations under the new concept.

• Maintained strategic focus on fashion, operational discipline, and capital structure, driving consistent growth and profitability.

• Financial Services EBITDA rose 7.2% YoY to R$ 119 million, with disciplined lending and portfolio quality.

Financial highlights

• Consolidated net revenue: R$ 2.69 billion in 2Q26 (+3.3% YoY); gross profit: R$ 1.70 billion (+8.5% YoY); gross margin: 63.3% (+3.0 p.p. YoY).

• Consolidated EBITDA: R$ 461 million (+12.7% YoY), margin 17.1% (+1.4 p.p. YoY); Retail EBITDA: R$ 342 million (+14.7% YoY), margin 17.0% (+1.8 p.p. YoY); Financial Services EBITDA: R$ 119 million (+7.2% YoY).

• Net income: R$ 168 million (+36.2% YoY), margin 6.2% (+1.5 p.p. YoY); EPS reached R$ 0.33 (+13.8% YoY).

• Apparel same-store sales grew 7.8% YoY, marking 12 consecutive quarters of growth.

• CAPEX totaled R$ 156 million (+31.1% YoY), focused on logistics automation and store renovations.

Outlook and guidance

• Continued focus on expanding and modernizing the store network, with over 20 stores to feature the new concept by year-end.

• Ongoing investment in technology, logistics, and digital channels to drive growth and efficiency.

• Expect continued margin expansion and EBITDA growth, though at a pace closer to long-term ambitions rather than recent exceptional quarters.

• Ongoing transition in product mix will continue for 1–2 years, with further improvements anticipated.

• Confident in capturing new opportunities through integrated supply chain and operational excellence.