By Brazil Stock Guide – Assaí Atacadista (B3: ASAI3; OTC: ASAIY) more than doubled second-quarter profit as stronger cash generation and lower receivables discounting reduced leverage to its lowest level in almost five years.
Net income reported under IFRS 16 rose 121% to R$484 million, from R$219 million a year earlier. On the pre-IFRS 16 basis used by the company to assess its underlying operations, reported profit increased 103% to R$537 million, while recurring net income climbed 93.6% to R$344 million.
The result benefited from PIS/Cofins federal tax credits and an improvement in net financial expenses. Even after excluding R$193 million in after-tax, non-recurring tax credits, recurring profit was nearly twice the level reported in the second quarter of 2025.
Gross revenue rose 2.4% to R$21.4 billion, while net revenue increased just 0.9% to R$19.18 billion. Same-store sales grew 0.9%, trailing food inflation of 3% during the period as pressure on household purchasing power prompted customers to trade down to cheaper products, brands and package sizes.
“Faced with higher prices, consumers are maintaining their shopping frequency but adjusting the composition of their baskets,” Chief Executive Officer Belmiro Gomes said. According to Gomes, that behavior helps explain the combination of sales growth, market-share gains and pressure on the average ticket.
Monthly customer traffic increased 3.4% to a record of more than 40 million shoppers. Assaí also gained 0.3 percentage point of market share on a same-store basis. The company estimated that World Cup matches reduced same-store sales growth by approximately 1 percentage point, as customers were less likely to make large stock-up purchases on match days and stores closed earlier.
Pre-IFRS 16 adjusted EBITDA, excluding extraordinary PIS/Cofins credits, slipped 0.7% to R$1.07 billion. The margin was broadly stable at 5.6%, compared with 5.7% a year earlier. Gross margin expanded by 0.4 percentage point to 17.1%, supported by the maturation of stores opened over the past five years and the rollout of higher-value services such as butcher counters, bakeries and deli sections.
The net financial loss narrowed 25.5% to R$421 million, reflecting a lower average debt balance and reduced receivables discounting costs. Those costs fell 75.5% to R$13 million.
Net debt, including discounted receivables, declined by R$1.39 billion over 12 months to R$12.4 billion. Leverage fell to 2.37 times EBITDA, from 3.17 times a year earlier and 2.52 times in the first quarter, reaching its lowest level since the third quarter of 2021. Discounted receivables were reduced by R$953 million to R$1.12 billion.
Assaí generated R$2.72 billion in free cash flow over the 12 months through June. Gross capital expenditure was cut by 46% to R$88 million during the quarter, in line with the company’s strategy of prioritizing cash generation and deleveraging.
The retailer is also developing new sources of revenue. Assaí opened its first two Assaí Farma drugstores in July and plans to have 25 locations in São Paulo state by the end of 2026. The format could eventually be expanded to 250 of the group’s current 313 cash-and-carry stores.
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