By Brazil Stock Guide – GPA (PCAR3), the Brazilian food retailer that owns the Pão de Açúcar brand, reported a wider net loss from continuing operations in the first quarter of 2026, as non-recurring and non-cash charges overshadowed a modest improvement in profitability.
The company posted a net loss of R$1.347 billion, compared with a R$93 million loss a year earlier. GPA said the quarter was affected by R$1.014 billion in extraordinary items, including a R$588 million write-off of overseas credits, as well as software write-downs, goodwill adjustments, other asset impairments and store-related impairment charges.
Excluding those effects, GPA’s adjusted net loss from continuing operations would have been R$333 million. The distinction matters: the headline loss looks severe, but much of the deterioration did not directly consume cash in the quarter.
Sales Still Soft
Net revenue fell 8.2% year over year to R$4.3 billion. The decline reflected the discontinuation of the Aliados format, portfolio adjustments and GPA’s decision to prioritize more profitable e-commerce channels rather than chase lower-margin volume.
Same-store sales rose 0.6%, suggesting that the core business was not collapsing, but still lacked meaningful momentum. For investors, the quarter reinforces a familiar tension: GPA is improving discipline, but the top line remains under pressure.
Margins Improve
Adjusted consolidated Ebitda reached R$458 million, up 12% from a year earlier. The adjusted Ebitda margin increased 1.9 percentage points to 10.5%, helped by cost control and a tighter focus on profitability.
That improvement is the main positive point in the quarter. GPA is becoming leaner, but not yet strong enough to offset the burden of financial expenses and restructuring effects.
Debt Costs Bite
Net financial expenses after IFRS 16 were negative by R$382 million, worsening 20% from a year earlier. The company attributed the increase mainly to Brazil’s higher Selic rate and higher costs tied to guarantees linked to contingencies.
Capex was cut sharply. Adjusted investments fell 54.8% to R$87 million, reflecting slower store expansion and lower spending on technology and logistics.
For GPA, the first quarter was less a clean operating recovery than a balance-sheet and portfolio clean-up. The margin story is improving. But with revenue falling, financial costs rising and large write-offs still hitting results, Pão de Açúcar remains a turnaround in progress rather than a turnaround completed.
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