Companhia Brasileira de Distribuição

Q4 2025 reported gross margin of 27.7% (+50 bps year over year), adjusted EBITDA margin of 10% (+40 bps), and same-store sales growth of 2.7%. Management said digital sales were almost BRL 700 million, up 6.7% versus 4Q 2024. Net loss from continuing operations was BRL 523 million, including a BRL 527 million impairment tied to the FIC stake sale and BRL 179 million of deferred tax asset recognition; excluding those items, continued net loss would have been BRL 175 million. Over the last 12 months, GPA generated BRL 699 million of operating free cash flow after CapEx, invested BRL 612 million in CapEx, and ended with pre-IFRS 16 leverage of 2.4x versus 1.6x a year ago. For 2026, management outlined an efficiency plan of at least BRL 415 million in operating cost and expense reductions and said CapEx should be reduced to BRL 300 million to BRL 350 million, while the FIC sale should generate about BRL 260 million after closing.

Alexandre Santoro framed the quarter as the start of a broader transformation focused on cash generation, financial discipline, and customer experience. He said GPA has strong assets, brands, and a loyal customer base, but also a structural mismatch in costs and operations that must be fixed through expense discipline, portfolio review, and better profitability. His tone was urgent and pragmatic, repeatedly stressing that the company must stop spending without generating cash and that the Board and management are aligned on addressing structural liabilities and debt maturities.

Rodrigo Manso emphasized gradual profitability improvement, citing gross margin of 27.7%, SG&A down 2.5% to 18.3% of net revenue, and adjusted EBITDA margin of 10%. He said the company generated BRL 699 million of operating free cash flow after CapEx in the last 12 months, driven by BRL 848 million of pre-IFRS 16 adjusted EBITDA, better working capital management, and lower CapEx. He also noted net debt rose by BRL 686 million in 2025, leverage ended at 2.4x pre-IFRS 16, and net financial income reached BRL 920 million, while saying 2026 should benefit from the BRL 260 million FIC proceeds and a lower CapEx budget of BRL 300 million to BRL 350 million.

Analysts focused on supplier financing, the efficiency plan, liquidity, store closures, and whether sales strength might be benefiting from GLP-1-related demand shifts. Management said supplier trends were tied to year-end negotiations and seasonality, with Q1 likely to show more cash consumption, and said the efficiency plan includes contract renegotiations, CapEx cuts, and expense reviews with some benefits already starting in Q1 2026. On stores, management said closures are a last resort, that about 20% to 25% of stores are underperforming, and that they are concentrating resources in São Paulo, Rio, and DF. On GLP-1, management said they are seeing more demand for healthier, higher-protein, lower-carb products and believe GPA is well positioned to capture that trend.