By Brazil Stock Guide – C&A (B3: CEAB3) posted higher profitability in the fourth quarter of 2025, according to its latest earnings report. Net income reached R$313.2 million, up 22.9% compared with 4T24. Adjusted net income rose 7.9% to R$269.8 million, supported by improved operating efficiency and lower financial expenses.
Revenue totaled R$2.47 billion, down 3.2% year over year. The contraction was largely driven by the discontinuation of smartphone sales, which reduced electronics revenue by 28.6%. Apparel, the company’s core segment, grew 0.6% during the quarter and 9.2% for the full year, indicating stability in its main business line.
Margin Improvement
A key takeaway from the C&A 4T25 results was margin expansion. Gross margin — the portion of revenue remaining after product costs — increased to 55.7%, up 1.2 percentage points from a year earlier. The gain reflects tighter inventory control, improved product mix and pricing discipline.
Adjusted EBITDA reached R$560.1 million under IFRS-16 standards, or R$431 million on a pre-IFRS basis. In practical terms, the business continued to generate solid operating cash even without strong sales growth.
Balance Sheet Strengthening
Another important aspect of the C&A 4T25 results was the significant reduction in leverage. Net financial expenses declined 18.1% to R$80.9 million, reflecting lower debt levels and improved cash management.
The company ended the quarter with a net cash position of R$84 million, compared with R$510 million in net debt one year earlier. This shift strengthens financial flexibility heading into 2026.
Operating cash flow totaled R$485.5 million. Free cash flow declined 28.4%, however, due to a 57% increase in capital expenditures to R$188 million, mainly for store openings, renovations and logistics investments.
Overall, the C&A 4T25 results suggest a company prioritizing profitability and balance sheet repair over aggressive top-line growth. Even with slightly lower revenue, stronger margins and reduced debt supported earnings expansion.