By Brazil Stock Guide – Riachuelo (B3: GUAR3) posted net income of R$1.285 billion in the fourth quarter of 2025, but the headline figure was largely driven by a one-off gain from the R$1.6 billion sale of Midway Mall. On a recurring basis, excluding the transaction, net income reached R$322.0 million, up 28.8% year-over-year, highlighting solid operational momentum in retail and financial services.
The mall divestment generated a gross gain of roughly R$1.2 billion, partially offset by about R$242 million in taxes, materially inflating reported earnings. As a result, reported net income does not reflect the pure operating performance of the apparel and credit businesses.
Stripping out non-recurring effects, consolidated adjusted EBITDA totaled a record R$659.9 million in 4Q25, a 16.7% increase from a year earlier. Adjusted EBITDA margin expanded to 20.6%, up 1.9 percentage points, marking the strongest level in five years.
Net revenue rose 5.9% year-over-year to R$3.2 billion, supported by a 7.8% increase in apparel sales despite cooler-than-usual temperatures. Gross margin improved to 60.8%, up 2.1 percentage points, reflecting tighter pricing discipline, lower markdown intensity and efficiency gains across the integrated supply chain.
The merchandise division posted adjusted EBITDA of R$507.4 million, up 15.8%, with margin reaching 20.0%. Apparel gross margin climbed to 57.8%, extending a multi-quarter expansion trend and underscoring improved product mix and sourcing execution.
Financial services continued to add operating leverage. Segment EBITDA rose 28.4% to R$126.4 million, supported by disciplined credit origination and stable delinquency levels. The Basel ratio stood at 17.4%, comfortably above regulatory minimum requirements.
For full-year 2025, recurring net income more than doubled to R$512.1 million, while consolidated adjusted EBITDA totaled R$1.76 billion, up 18.1% from 2024. Net revenue increased 9.0% to R$10.5 billion, with margins expanding across both core segments.
Riachuelo ended December with R$1.9 billion in cash and net debt of R$560 million, equivalent to 0.3 times EBITDA, preserving a conservative leverage profile even after distributing R$1.5 billion in dividends funded by the mall sale.
While the Midway transaction significantly boosted reported profit, the adjusted and consolidated figures show that margin expansion and operating discipline — rather than asset disposals — were the key drivers of structural earnings growth in 2025.