By Brazil Stock Guide – Brazil’s Lojas Quero-Quero SA (B3: LJQQ3) reported wider losses in 2025 even as revenue continued to grow, reflecting higher financial expenses and weaker margins in a challenging retail environment.
The company posted gross revenue net of returns of 3.17 billion reais ($636 million) in 2025, a 3.8% increase from the previous year. In the fourth quarter, revenue reached 857.9 million reais, up 3.2% year-on-year, supported by growth in financial services and credit card operations.
Profitability pressured by higher capital costs
Despite the improvement in sales, profitability deteriorated significantly.
The retailer reported a net loss of 161.9 million reais in 2025, compared with near break-even results a year earlier. In the fourth quarter, the company posted a net loss of 42.7 million reais, reversing a profit recorded in the same period of 2024.
Financial expenses increased sharply during the year. Net financial costs rose to 167 million reais, a 38.1% increase year-on-year, reflecting the impact of higher borrowing costs linked to Brazil’s elevated benchmark interest rate.
EBITDA and margins decline
Operating performance weakened as well.
EBITDA totaled 151.5 million reais in 2025, representing a 36.1% decline compared with the previous year. In the fourth quarter, EBITDA reached 44.2 million reais, down 34.9% year-on-year.
Adjusted EBITDA dropped even more sharply, falling 62.9% for the full year. Gross profit totaled 904.3 million reais in 2025, a 2.6% decline, while gross margin narrowed to 28.5% of revenue, compared with 30.4% in 2024.
The company said margin compression was mainly driven by lower profitability in financial services and a highly promotional retail environment amid weaker demand.
Same-store sales decline
Retail activity slowed in the second half of the year.
Same-store sales fell 1.8% in 2025, including a 1.5% drop in the fourth quarter, reflecting softer demand and the impact of higher interest rates on consumer purchasing power.
Expansion and financial services growth
Despite the tougher operating environment, the company continued expanding its footprint.
Lojas Quero-Quero ended 2025 with 586 stores, after opening 21 new locations during the year across southern and central-western Brazil.
Financial services remained a major growth driver. Revenue from financial services reached 893.2 million reais in 2025, an increase of 12% from the previous year. The VerdeCard credit portfolio totaled about 1.01 billion reais, rising 6% year-on-year.
Debt and leverage
As of Dec. 31, 2025, the company reported adjusted net debt of 207.1 million reais, with a leverage ratio of 1.4 times adjusted EBITDA.