By Brazil Stock Guide – Riachuelo (B3: GUAR3) delivered record earnings in the third quarter of 2025, underscoring the payoff of its ongoing transformation plan that integrates fashion retail and financial services. The company’s adjusted consolidated EBITDA rose 14.8% year on year to R$402 million, while net income jumped 63% to R$74 million, marking the highest level in its history for the period.
Record Operating Margins
The retailer reported its eighth consecutive quarter of margin expansion in apparel, with gross margin climbing 2.5 percentage points to 57.3%, the strongest in its series. Consolidated EBITDA margin reached 16.4%, up from 15.2% a year earlier. Management highlighted productivity gains from its integrated supply chain and better pricing discipline as key drivers of the improvement.
Revenue grew 6.6% year on year to R$2.45 billion, supported by a 7.3% same-store sales increase in apparel and strong seasonal collections such as Pool + ALPV and Giullier + Riachuelo. The results also reflected nine straight quarters of positive apparel SSS and ten consecutive quarters of market-share gains, outperforming the national apparel retail index (PMC/IBGE).
Solid Financial Services
The Midway-branded financial-services arm continued to add resilience, with EBITDA up 6.5% to R$119 million and net revenue rising 9.2% to R$618 million. The delinquency rate above 90 days fell to 17.7%, from 19.8% a year earlier, amid disciplined credit growth and new accounting standards that extend interest recognition. The credit portfolio reached R$6.2 billion, led by R$5.0 billion in cards and R$790 million in personal loans.
Cash, Debt, and Investment Cycle
Riachuelo ended the quarter with R$1.1 billion in cash and net debt of R$839 million, equivalent to a 0.5x net debt/EBITDA ratio, highlighting its conservative leverage. In October, parent company Guararapes issued R$1.45 billion in debentures at DI+0.95%, aiming to extend maturities and lower funding costs.
Capital expenditure jumped 39% year on year to R$158 million, reflecting store expansion, logistics, and technology upgrades. The company also distributed R$58.8 million in dividends, or R$0.1177 per share, using retained earnings from 2024.
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