Lojas Renner S.A.

Q4 retail revenue grew 4.3% and apparel revenue grew 5.1%; full-year 2025 retail revenue grew 9.2% and apparel revenue grew 10.4%. Q4 retail gross margin was 56.5%, up 0.7 percentage points year over year, and apparel gross margin was 57.9%, up 0.8 points. Full-year gross margin was 56.1%, up 0.7 points. Net income rose 13.4% in Q4 and 21.8% for the full year to a record BRL 1.5 billion; full-year EPS grew 26.7%, also a record. ROIC increased 2.3 percentage points to 14.7%, and cash generation was BRL 1.4 billion. Management guided 2026 revenue growth of 9% to 13%, expected 50 to 60 store openings, and said proposed 2026 CapEx is around BRL 1 billion, mainly for store openings and renovations.

Fabio Faccio framed 2025 as proof that the model is working, especially through higher gross margins, lower markdowns, better inventory quality and expense dilution. He emphasized that Renner is evolving from a fashion retailer into a stronger fashion brand, backed by collaborations, licensing, ambassadors and AI-driven personalization. His tone was confident and constructive, stressing that the company is still early in a multi-year 2026-2030 evolution and that 2025 showed the plan is feasible.

Daniel dos Santos focused on the mechanics behind the results: gross margin improvement came from a higher share of new items, better supply model execution and price adjustments in line with inflation. He highlighted expense leverage, with operating expenses up 2% in Q4 and 8% for the full year, and said digital GMV grew 10% to 14% of total sales. He also pointed to BRL 1.4 billion of cash generation, BRL 1.8 billion returned to shareholders, a BRL 1 billion capital budget for 2026, and 50 to 60 planned store openings.

Analysts pressed on sales-per-square-meter leverage, renovated-store performance, gross margin durability, technology CapEx, expense efficiency, new-store ramp, pricing, Realize credit growth, digital profitability and the payout/buyback framework. Management said renovated and mature stores are performing above cluster averages, that gross margin gains are not just from the distribution center but from the full end-to-end model, and that technology spending was mainly licensing-related phasing. On capital returns, Daniel said buybacks depend on share price, governance limits and reserve replenishment, and that distributions could exceed the upper guidance range if cash flow and reserves allow it.