By Brazil Stock Guide – Grupo Casas Bahia (B3: BHIA3) posted a R$10.1 billion net loss in the second quarter of 2026, compared with a R$555 million loss a year earlier, in financial statements on which Ernst & Young declined to express a conclusion because of material uncertainty related to the retailer’s ability to continue as a going concern.
The financial statements were released at around 2 a.m. on Sunday, after the company had initially been expected to publish its results on Friday following the market close.
EY’s report, dated Saturday, August 15, said the auditor was unable to perform sufficient review procedures to support a conclusion on the company’s interim financial statements.
According to the auditor, a R$11.2 billion loss in the first half, negative working capital and negative shareholders’ equity of R$8.27 billion, among other factors, indicate a material uncertainty that may cast significant doubt on Casas Bahia’s ability to continue as a going concern.
EY added that the company depends on the successful implementation of operational and financial measures to support its working-capital needs and meet obligations as they fall due.
Given those uncertainties, the auditor said it was also unable to conclude on the appropriateness of the going-concern basis used in preparing the financial statements.
International fundraising deal falls through
The notes to the financial statements show that part of the pressure on liquidity followed the failure to complete an international fundraising transaction that had been considered “extremely relevant” to the company’s financial planning for the second quarter.
The transaction was at an advanced stage, with due diligence completed and legal documentation negotiated, but the anchor investor withdrew from the talks, according to the company.
Casas Bahia does not identify the anchor investor in its financial statements and does not disclose the exact amount it had planned to raise. The management report says only that an anchor investor had been secured and the bookbuilding process had been structured before the transaction fell through.
The notes subsequently confirm that the investor with whom the company had been negotiating withdrew, again without identifying the party.
Other liquidity alternatives, including raising fresh funds through bridge loans, also failed to materialize within the timetable and under the conditions contemplated in the company’s financial plan.
Casas Bahia also said it has R$6.3 billion in federal and state tax credits, but has faced difficulties monetizing or using them, limiting immediate access to cash.
The failed capital raise, reduced availability of commercial and financial credit and high funding costs weakened the retailer’s purchasing capacity.
Consolidated inventories fell to R$4.24 billion in June from R$5.4 billion in March, a R$1.16 billion decline in three months. Inventory days fell to 75 from 95.
Casas Bahia said the decline reflected both working-capital discipline and credit and purchasing constraints, which affected product availability across certain categories, stores and sales channels.
Company cites possible court-supervised restructuring
In the notes to its financial statements, management said it continues to negotiate with suppliers, financial institutions and creditors while evaluating alternatives to strengthen liquidity and reorganize its capital structure.
Among the measures that could potentially be implemented, the company explicitly mentions a new out-of-court restructuring or a court-supervised restructuring, known in Brazil as recuperação judicial.
Casas Bahia cautioned, however, that there is no assurance such measures will be adopted or that initiatives already underway will deliver the expected results within the amounts or timeframes assumed by management.
The financial statements were prepared on a going-concern basis and do not reflect the potential effects of a formal debt and liability restructuring.
Adjusted loss also widens
A large portion of the R$10.1 billion quarterly loss reflected non-recurring accounting charges associated with revised financial projections.
These included a R$5.7 billion write-off of deferred tax assets, roughly R$970 million in goodwill impairment, R$1.8 billion in provisions related to contractual reviews, as well as costs associated with workforce restructuring and store closures.
Even excluding those items, however, the company remained deeply in the red. The adjusted net loss widened to R$978 million from R$555 million in the second quarter of 2025.
Net revenue rose 1.6% to about R$7 billion, while adjusted EBITDA fell 9.4% to R$518 million. Adjusted EBITDA margin declined to 7.4% from 8.3% a year earlier.
Gross margin, by contrast, improved by 2.8 percentage points to 32.9%.
298 stores closed
Casas Bahia has accelerated the second phase of its transformation plan and completed the closure of 298 stores, shifting its strategy toward cash generation, profitability and returns on capital rather than volume growth.
The retailer said tighter credit conditions, the failed international fundraising deal and weaker consumer demand had made it necessary to operate at a smaller scale.
Beyond store closures, the plan includes structural reductions in costs and investment, lower inventory levels, reduced capital employed and greater selectivity across digital channels. But the financial pressure facing Casas Bahia appears far from resolved.
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