Good morning, everyone. Welcome to Lojas Quero-Quero second quarter 2026 earnings conference call. My name is Igor Sehn, Financial Planning and Investor Relations Manager. Joining me today are Peter Furukawa, Chief Executive Officer, and Jean Mello, CFO and IRO. To begin our presentation, please turn to slide three. Today, we will begin speaking about our strategic pillars, followed by our expansion and key projects. We will review our financial and operating results for the second quarter of 2026.
Finally, we will open the floor for a question- and- answer session. Questions may be submitted at any time by using the Zoom Q&A butto`n. We will move on to slide four. I turn the floor over to Peter.
Well, good morning, everyone. It is a pleasure to be here once again to share the highlights of our second quarter 2026 results. As we reach the midpoint of the year, we continue to see operations evolving consistently in line with the expectations we established at the beginning of 2026. Although the macroeconomic environment remains challenging, particularly due to the high cost of capital. We remain focused on what is within our control, strengthening our customer value proposition, maintaining financial discipline, preserving the quality of our credit portfolio, and continuing to execute our long-term strategy.
Throughout 2025, we made a deliberate decision to enhance our customer service and competitiveness in order to gain market share, even in a weaker consumer environment. We had positive signals delivered in the first quarter of the year. We now see that strategy reflected more clearly in our operating performance. During this quarter, we continued to make progress across our five strategic pillars. Under our first pillar, gaining market share, gross revenue increased 9.7% year-over-year, reaching BRL 834 million.
The main highlight, you can see in same-store sales that represented 7.6%, showing the gradual recovery we observed since the second quarter of last year. We also inaugurated three new stores, ending the quarter with 576 stores in operation. We have had significant market gains in credit and collections excellence. We continue to balance growth with portfolio quality. Our credit portfolio grew 12% vis-à-vis the second quarter of 2025. While delinquency remained under control with loans over 90 days past due at 12.5%, in line with the company's historical levels.
This reinforces our confidence that our strategy of continuously refining our credit models is still appropriate for the current economic environment. Under the do more with less pillar, we continued to improve operational efficiency. Selling expenses increased only by 1.8% on a nominal basis below the inflation rate. Once again, this is below the inflation rate, reflecting our ongoing cost control efforts. Administrative expenses remained virtually flat compared to the previous year, demonstrating disciplined resource allocation even as sales growth resumed.
In digital sales, our digital initiatives continued to account for approximately 23% of total sales, reinforcing the consolidation of our fully integrated physical and digital business model. Finally, under our high-performance culture pillar, we continued investing in leadership development. We graduated 26 new store managers and ended June with 254 employees employed in our Desponte leadership development program, preparing future leaders to take on management positions across our store network to support the company's continued growth.
In expansion, we ended the second quarter with 576 stores in operation across 495 cities in the states of Rio Grande do Sul, Santa Catarina, Paraná, Mato Grosso do Sul, and São Paulo. During the first half of the year, we opened five new stores, including three during the second quarter, two in Paraná state, in the cities of Maringá and Guarapuava, and one in Iguatemi , Mato Grosso do Sul. We also completed three store remodels as part of our active portfolio management strategy, always aimed at continuously improving the profitability of our store base.
A key characteristic of our business model remains unchanged. 56% of our stores are located in cities with fewer than 25,000 inhabitants. 73% are in municipalities with fewer than 5,000 inhabitants. Now, the results achieved in the first half of the year reinforce our confidence in the strategy we are executing. We continue to prioritize cash generation, credit portfolio quality, sustainability to allow for consistent growth for the company during 2026. With this, I will give the floor to Jean, who will refer to the financial results during the quarter.
Thank you, Peter. A good day to all of you. I will go straight to the next slide to speak about the behavior of our revenues during this quarter. We will go into a little more detail. We had a quarter that shows that consistent and gradual improvement of the company's sales, and consequently, of the revenues. We had a 10% growth in revenues for the quarter, and the main indicator is same-store sales. In the graph at the bottom of this slide, you can see that throughout the second quarter of last year, we had signals of a lower demand.
We were able to implement some changes, improving proposals for customers, and we saw benefits as of the fourth quarter of last year. Therefore, the performance improved through time. In the first quarter, we mentioned that with the exception of lines geared to air conditioning that had done very well in the first quarter 25, all others were positive. We had a slight improvement, and this has been consolidated now in the second quarter, where we reached same-store sales growth of 6.7%, total sales growing 8%, 8% growth in financial services, and a growth in credit cards, 9%.
This was based on our expectation of gradual operational improvement throughout the year. This expectation, of course, remains. What we had been planning, I think, has become ever clear here. On the next slide, we were able to maintain a virtually stable position with the retail margin in a scenario of weaker demand. Despite the gain of share, we were able to maintain a stable retail margin vis-à-vis the first margin, 2.5% based on gross profit compared to last year. We are performing somewhat below the plan, and we have the financial services.
We knew that we would have a higher cost, as Peter mentioned, because of the cost of capital somewhat higher than what had been foreseen at the beginning of the year. Of course, we have been very cautious. We are careful with default levels. We maintain our customer portfolio under control, and we can speak about this in detail subsequently. To ensure that everything is under control is to be more conservative in the granting of credit. This means to have less products that have a high rate of default.
We sort of put aside the revenue margin for the short term to guarantee that in coming quarters, even in an adverse scenario, we can maintain a controlled credit portfolio and a healthy growth for the company. On the next slide, we have construction during the last quarters and during the last years, always keeping a focus on the level of expenses. It is important to keep this under control and to decide where to allocate our investments. In this second quarter, we have a nominal reduction in operating expenses, very similar to what we saw in the first quarter.
Yes, we do have that ability to have operating leverage. General and administrative expenses aligned with the second quarter of 2025, positive as well as other SG&A expenses. This part of expenses is being kept under control, and we can go back to having a better operating leverage as soon as the sales increase. On the next slide, we reach an EBITDA of BRL 32.6 million vis-à-vis BRL 29 million for the previous quarter. As the same-store sales begin to show an improvement, as we saw in the previous slides.
We can show you that we have an opportunity for operational leverage, very similar to the second quarter of 2025. The same holds true for adjusted EBITDA, aligned with the previous quarter. On the next slide, we maintain the cost of capital a little higher but more aligned with the second quarter of 2025. The net result of BRL 30 million nominally is virtually the same as that of the second quarter of 2025. This is what we had been remarking on, that as soon as we could have an increase in sales Same-store sales on a positive direction.
We would be able to stabilize our results and have that possibility of improving throughout the year. On the next slide, we will go into greater detail. We maintain the quality of our portfolio. Here you can see the growth of our credit portfolio historically, especially with the 90-day default rate that is maintained at 12.5% for the second quarter. This, of course, is a historical achievement, especially if we compare this with 2024. We follow up on the default levels in the market as a whole, and you can see that we have been able to maintain the quality of our credit portfolio, and we have an ever-growing credit portfolio growing in a very healthy way.
We stand at 12.5% in the second quarter, compared to 12% in the previous quarter. These results are due to a broader use of our credit cards. We had a growth of 13% in this quarter, and we're gaining relevance in our credit cards for our customers. For the customer, this credit card is becoming ever more relevant in their day-to-day uses. We now go on to the next slide. Something that will have an impact, as Peter mentioned, the maintenance and control default and our credit portfolio, but also have an impact on our cash flow.
We have a guidance of opening up several stores this quarter. We opened up five in this quarter. This shows a reduction of investment, once again because of the high cost of capital. You see an investment of BRL 16.2 million. All of this will lead us to what we see on the next slide, which is a controlled net debt. In the last four quarters, we haven't had cash consumption, even with our financial expenses and the high cost of capital. Despite this, we're working strongly, focusing on investments, working capital, to maintain the net debt under control.
In the second quarter, we have the same net debt as in the first quarter of 2026, which is the nominal debt with variations of BRL 1 million or BRL 2 million. This compared to the second quarter of 2025. We had already remarked on this. It becomes clear in the second quarter that we're working on cash flow to maintain, once again, the company debt under control. I don't want to be repetitive, but this is what has been happening historically. We have a cash consumption in the first half of the year and cash production in the second half of the year.
This is what tends to normally happen. We don't expect anything different throughout this year. We have that opportunity to improve and generate cash beginning in the second half of this year, as we have done historically. Very well. With that, I would like to end my presentation. I will return the floor to Peter, who will begin the question- and- answer session.
Thank you, Jean. We will now begin the question- and- answer session. We remind you that the questions can be sent in through the Q&A icon in Zoom. The first question is from Vinicius Pretto from Itaú BBA. It will be answered by Peter. Do you think the FIFA World Cup had a relevant impact on sales in the second quarter? Was it positive or negative? Did you estimate the magnitude of this effect? Looking forward, which will be the evolution of demand in the third quarter and your expectations for the second half of the year?
Good morning, Pretto. It's always a pleasure to speak to you. Regarding the FIFA World Cup, yes, we did have a slight increase in the sale of television sales, but nothing that truly impacted our sales. At the end, I would like to comment on our growth in share. We were not able to identify a true impact caused by the FIFA World Cup. Regarding your second point, the evolution of consumption in the third and fourth quarters and our vision until the end of the year, I don't foresee a growth of the market in the second half of the year.
What I do see is our gain in share. I think there is significant room to continue to gain share. I don't believe the market will grow very much because of the interest rate that we have. We're going to focus on improving our performance, products, price, and assortment to gain share. This is our quest. We have seen competition that is also suffering significantly. This gives us the opportunity to continue to grow. This is my vision of the rest of the year.
Thank you, Peter. The second question is also from Vinicius Pretto from Itaú BBA. This will be answered by Jean. What are you thinking about in terms of cash generation for the second half of the year?
I have already remarked on this. We do have a seasonality that benefits us in the second half of the year in terms of sales. Now, in this quarter, we have a net debt very aligned with the net debt of the quarter in 2025, and this is a trend that we should see repeated in the third quarter. The trends are very similar to have a good performance. Well, formerly, we didn't consume cash in the first half of the year, and we would produce cash in the third and fourth quarters. Of course, we have to maintain sales at the levels they are presently, and this is what happened in the second half of 2025.
We do have a few factors, such as the drop in the Selic rate, that might end up being positive. What we do expect is to maintain in the third quarter a debt that is equal or perhaps lower than what we had in the third quarter in 2025. Now, we will continue with that focus on the control of our working capital. You'll see that our accounts and the balance are properly under control to continue to see an increase in sales and improvement of results in the coming quarter, resulting in the continuity of a controlled net debt and leverage. We hope to have a third quarter that is better than that in 2025.
Thank you, Jean. The next question will also be answered by Jean. It refers to credit. We can see the evolution of demand for credit and your default rates. What will happen with the new Desenrola in the recovery of clients under default and the impact on your portfolio and the fact that people will take more credit?
Well, the demand for the customer that exists, we see that it has increased since the first quarter. That demand is there. Presently, however, we have to be careful not to service all of that demand if it is not sustainable through the coming quarters and year. We have decided to become more conservative in products that pose a higher risk, and this is what is pressuring our margin in financial services. We're at a relatively stable level.
We would like to continue to grow in the coming quarters simply because we have maintained the default rate under control in a scenario of deterioration of the microeconomic factors in Brazil. We have indebtedness, high default levels that are consistently worse than they were in previous years. Therefore, this strategy that we have adopted has allowed us to maintain all of this under control. Desenrola in the market should bring about some benefits. For us, it has an impact in collection and credit as well.
It has had an impact on retailers and other companies impacting the financial results. Now, in terms of our default rate and portfolio, it has not had an impact in the second quarter, but this is a benefit for the market as a whole, as it allows people to leave that universe of defaults. As soon as this becomes more stable with a dropping interest rate and less people in a situation of debt and default in the market, we can have a positive increase in demand, and we can, of course, service that demand. What we're going to do this very calmly to avoid any default.
Thank you, Jean. Next question will be answered by Peter. A growth of 6.7% in same-store sales shows an increase of pace compared to the first quarter of 2026 and other quarters in 2025. Has this improvement been consistent during the first half, or is it concentrated on some quarters? Is this due to some specific categories like air conditioning in the first quarter of 2025?
Pretto, when we look at our same-store sales, the figures are very similar. We had a variation of 3% or 4% in home appliances. We haven't had great variations. We did not have a one-time growth for a specific category. We have had consistent growth increasing through time. A comment that I would like to make here is that since mid-last year, we have been fostering Luciano Scotta, who is our Director of Collection. He has taken over the part of retail as well, and along with the team, he has been reviewing all of our processes, looking at the opportunities.
While we don't have a crystal ball to resolve this, what we do have are several issues that have to be tackled at a minor level. He has created a team with a new Director of the Purchasing Area, Luiz Felipe Barbosa, and they're working jointly with their teams night and day, and we have begun to see the results. They're in a hurry to see better results, as you know, women cannot have a child in less than nine months. This takes time. You have to wait for the pregnancy to mature. We have the challenges of macroeconomy, they seem to be pointing upwards.
I would like to congratulate them for the wonderful work they have done with their teams. Thank you.
The last question will be answered by Jean. It's from Thomas Peredo from F8 Capital. If you could give us more details on the pressure of margins in the retail market. Is this due to market reasons, competitiveness, has there been a one-time effect in the quarter, an increase in diesel? In the third quarter, you have a weaker base of comparison as this was the worst quarter for same-store sales in 2026. Should we expect a relevant increase of pace in same-store sales in the third quarter? What is your vision of gross margin?
Good morning, Thomas. Are you well? First of all, regarding margin and then same-store sales. Regarding the margin, once again, there is seasonality. Historically, in the first half, we have better retail margins than in the second quarter, when we look at the somewhat lower margins of the second quarter than in the first quarter. This is due to seasonality. In some years it becomes more or less relevant. When we look at the third quarter of the previous year, we have a drop of 50 points in the retail. This is due to a combination.
We had a higher cost in logistics because of the increase of diesel, because of the war. This has an impact in the country. We had price increases, price pressure. As Peter has already remarked, and what has been our focus in the last quarters, is to revisit the value proposition for the customer. We're truly carrying out a revision, and we have come to a margin that will enable us to truly work well in the market. The market has not been increasing 8% as we grew in the second quarter.
It's a mix of things that we have been doing that enable us to gain share this relatively stable margin that should become sustainable. Well, we still have volatility, and we will continue to have volatility. This is what we see at the beginning of the second half of the year. Now, regarding expectations for same-store sales, the margins that we have presently should be replicated in the coming quarters, of course, with certain fluctuations in terms of the level. We truly should not have a significant impact, especially negative impacts, when it comes to margin.
Regarding sales, yes, in the third quarter, we will have greater weakness. If we maintain the present day level of sales in the second quarter, we have the potential of delivering a stronger same-store sales in the third quarter. There are other factors we have to be careful with, but up to present, we have maintained this vision that we will maintain our sales levels. We have had weather impacts, especially in Rio Grande do Sul, of course. This holds back the sale of construction material. Once the climate is more stable, we should go back to the sales level we saw in the second quarter.
If we maintain the second quarter, we will have a better same-store sales average. For the third quarter.
Thank you, Jean. Now, with that question, we would like to conclude the Q&A session. We remind you that our IR team is at your entire disposal to verify doubts through the email ri@quero-quero.com.br. I return the floor to Peter for the company's closing remarks. Well, we would like to thank all of you for your attendance. It was a pleasure to carry out our earnings call conference. Our expectation is of a gradual operational enhancement, maintaining sales and a controlled cash flow and debt in this scenario that is definitely below its potential.
This is what we have been doing. We hope to continue delivering operational results that improve during the coming quarters. Thank you all, and I will give the floor to Peter.
Now to close, I have some messages here. The first is that the quarter results reinforce our confidence in the strategy we're following. The recovery of same-store sales that evolved in the first quarter became consolidated in the second quarter. It confirms our value proposition and our service to customers are generating good results. Now, this happened without leaving aside our financial control. Now, the cash generation is a priority, and this year we have not consumed any cash, which is very positive.
Another factor is the quality of our credit portfolio. We maintain it highly aligned, even in a scenario of increases and despite the macroeconomic environment. We maintain our expenses under control as well as the quality of our credit portfolio. We look upon the rest of 2026 with a great deal of confidence. We will maintain our operational discipline, and we believe that the results presented in the first half of the year will ensure the evolution of our company in a gradual and consistent way, always focusing on cash generation, the quality of credit, and the creation of value in the long term.
A 10% increase in revenue, 50 basis points in the retail margin. The fact that we're holding back default problems and maintaining a constructive portfolio allows us to control the cost below inflation. The fact that we don't consume cash shows a very positive execution of a team that truly makes me proud to manage Quero-Quero.
Thank you once again for your attendance. We hope to see you again in our next call