Azzas 2154 (AZZA3) Posts Recurring Net Income of R$ 190.6 Million in 3Q26

Gross revenue from continuing brands totaled R$ 3.6 billion, down 3.6%. Net revenue was R$ 2.8 billion (R$ 2,844.2 million), down 4.2%. Gross profit was R$ 1,614.4 million, a change of -0.6%, with a gross margin of 56.8%, up 2.1 p.p. The company attributes the improvement to lower discount levels and a greater share of direct-to-consumer sales channels (sell-out).

Recurring EBITDA (earnings before interest, taxes, depreciation and amortization) totaled R$ 466.4 million, down 2.2%, with a margin of 16.4%, up 0.3 p.p. Recurring expenses excluding depreciation and amortization came to R$ 1,155.9 million, stable (-0.1%). In the first nine months of 2026, recurring EBITDA was R$ 1,174.5 million (-18.4%) and recurring net income was R$ 361.0 million (-40.1%).

Operating cash generation was R$ 385.2 million, up 39.6% from 3Q25. Net debt closed at R$ 2,057.9 million, R$ 69.3 million below 2Q26, and leverage (net debt to trailing 12-month recurring EBITDA) stood at 1.48x, versus 1.52x in the previous quarter. The cash conversion cycle fell 32 days, to 98 days.

The company also announced that CADE approved, without restrictions, the corporate reorganization that will create two publicly traded companies, Arezzo&Co and Grupo SOMA. The decision became final and unappealable on November 4, 2026. The transaction still depends on corporate approvals. FARM Rio will be a subsidiary of Arezzo&Co, with 57.4%, and Grupo SOMA will hold 42.6%.