By Brazil Stock Guide – Pague Menos S.A. (B3: PGMN3) posted third-quarter results that exceeded market expectations, as rising digital sales and operational efficiency lifted profitability. The company reported adjusted net income of R$ 80.6 million (US$ 14.4 million), up 49.6% year-on-year, with its net margin expanding to 1.9%, signaling continued improvement in financial discipline and scale efficiency.
According to the company’s earnings release on November 3, 2025, gross revenue rose 18% from a year earlier to R$ 4.14 billion (US$ 739 million), while adjusted EBITDA reached R$ 260.1 million (US$ 46.4 million), a 36.4% increase, the highest third-quarter margin in Pague Menos’s history at 6.3%. The company’s gross margin also improved to 29.9%, supported by better inventory management and commercial gains. The net debt-to-EBITDA ratio fell to 2.5x, underscoring its ongoing deleveraging process.
“The combination of sales growth, margin expansion and financial discipline consolidates a new operational level for the company,” said CEO Mario Queirós during the Q&A session, highlighting stronger-than-expected efficiency in the company’s logistics and digital platforms.
Operational highlights and digital performance
Same-store sales advanced 17.6%, roughly five times inflation for the period, while total sales rose 18%. Digital channels continued to outperform, representing 19.8% of total revenue, a 4.5 percentage-point increase year-on-year. Omnichannel sales hit R$ 819 million, up 52.9% from a year earlier, fueled by mobile app transactions that doubled in 12 months. The app now accounts for more than half of online purchases.
The retailer closed the quarter with 1,667 stores, including 1,493 under the Pague Menos banner and 174 Extrafarma units. Despite a moderate expansion pace — 27 openings in 12 months — the company achieved higher productivity, with average monthly sales per store reaching R$ 831,000, up 17.3%.
Margins and cost control
Sales expenses totaled R$ 872 million, equivalent to 21% of gross revenue, down 0.5 percentage points year-over-year, while gross profit rose 20% to R$ 1.24 billion. The contribution margin improved to 8.8%, and the company reported the lowest inventory loss ratio since its IPO. Pague Menos also benefitted from tax efficiencies and lower financing costs.
Sector context and market positioning
The company’s national market share climbed to a record 6.7%, marking the eighth consecutive quarterly gain. The strongest performance came from the Northeast region, where Pague Menos now holds 19.8% of the market, maintaining a clear lead over competitors from the Abrafarma network. The company’s proprietary health hub expanded to 1,162 Clinic Farma units, delivering 5.6 million consultations over the past year, while its vaccination business surged more than 500% in volume.
Market reaction and outlook
Shares of PGMN3 have gained 14% year-to-date, closing at R$ 5.28 in the session before results. Investors will be watching the company’s earnings call on November 4 at 10:00 BRT, as management is expected to detail how the recent equity offering and new logistics investments may sustain growth and strengthen capital structure.