CGRA3: quote, dividends and indicators for Grazziotion

Grazziotin S.A. is a Brazilian publicly traded company, with common and preferred shares listed on B3 under the tickers CGRA3 and CGRA4. Its origins date back to 1950, in Passo Fundo (RS), when brothers Tranquilo, Plínio, João and Idalino Grazziotin founded a wholesale and retail business for dry goods and groceries, supported by capital from their Italian immigrant family. Over the following decades, the company underwent significant transformations: it shifted from wholesale to retail, diversified its assortment to include home appliances, furniture and building materials and, from the 1980s onwards, repositioned itself with a focus on fashion and bazaar products. In 1979, it became a corporation with publicly traded shares, and in 1981 it adopted the name Grazziotin S.A., kicking off an expansion cycle based on different chains and store formats.

Grazziotin’s core activity is brick-and-mortar retail of apparel, footwear and home goods, complemented by its own store credit and financial solutions. The business model is geared towards serving end consumers, with a focus on smaller cities in Brazil’s Southern Region, generally municipalities with more than 15,000 inhabitants. The company does not manufacture goods; it operates in an integrated way within the distribution chain, purchasing products from about 400 Brazilian suppliers selected based on cost, quality, logistics and alignment with local consumption profiles. In addition to retail, the group operates in complementary segments through subsidiaries, such as consumer finance, agribusiness, reforestation and commercial property leasing, building a diversified revenue portfolio, although store-based retail remains predominant.

In the retail segment, which accounts for most of consolidated net revenue, Grazziotin operates five main banners: Grazziotin, Tottal Casa & Lazer, Por Menos, Franco Giorgi and GZT. Grazziotin stores, present in Southern states, operate as apparel and home-goods chains for the whole family, with menswear, womenswear, childrenswear, footwear, bed, table and bath linens, and decor. The Tottal Casa & Lazer chain, created in 1984 and present in Paraná and Rio Grande do Sul, specializes in home goods, bazaar items, camping, decor, small appliances and kitchenware. The Por Menos brand, launched in 1985, is positioned as a value retailer, offering a mix of fashion, footwear and home products at affordable prices, with easy store credit. The Franco Giorgi chain, founded in 1989, focuses exclusively on menswear, developing private-label products. In 2020, the GZT banner was created, combining in a single physical location the assortments of the group’s other chains, seeking operating synergies, lower fixed costs and better use of teams and space in cities with multiple stores.

The brick-and-mortar operation is supported by a distribution center in Passo Fundo, which handles receiving, checking, storage and shipment of goods to stores. Products arrive pre-priced, in standardized packaging, and are directed either to storage or to cross docking, speeding up replenishment and reducing intermediate inventories. Store replenishment is based on an integrated management system that considers inventory turnover and demand by point of sale, with weekly or biweekly deliveries by third-party carriers, including for locations hundreds of kilometers from the distribution center. The purchasing process is centralized and evaluated by a committee that tests collections in pilot stores before scaling up, allowing the product mix to be adjusted to consumer behavior in different markets. In stores, the company adopts a self-service format, with in-house teams responsible for merchandising and sales.

In the digital space, Grazziotin has been expanding its presence since 2018, when it launched e-commerce for the Franco Giorgi brand. Later, it rolled out online stores for the Grazziotin, Tottal and Por Menos chains, culminating in 2022 with the creation of the GZT Store marketplace. This platform brings together all the company’s chains and partner brands in a single digital environment, with a focus on an omnichannel experience and on using digital store credit as the main payment method, a feature that keeps the online operation close to the group’s traditional brick-and-mortar retail approach. The marketplace reinforces the strategy of maintaining proprietary credit as a cornerstone of the commercial relationship, expanding sales channels without significantly changing the company’s positioning towards middle- and lower-income consumers.

The group’s diversification also includes other lines of business. Centro Shopping, a shopping-mall subsidiary, owns a property of about 7,500 m² in the historic center of Porto Alegre (RS), fully leased to a single tenant, generating rental income from commercial space. In agribusiness, Grato Agropecuária produces grains at two units, Ipanema and Santana, covering more than 19,000 hectares, part of which is irrigated, dedicated mainly to soybeans, corn and cotton, in a joint venture in which Grazziotin shares equity with Todeschini S.A. Production is sold to trading companies and markets in different regions of the country, using its own storage and a sales policy with advance payment and pickup at origin. In the forestry segment, Floresta Grazziotin, located in Piratini (RS), maintains Pinus elliottii and eucalyptus plantations over more than 1,600 hectares; monetization takes place through the sale of standing timber, transferring management, harvesting and transport to the buyer.

In the financial area, Trevi Participações was created specifically to hold an ownership stake in Grazziotin Financeira, a financial institution regulated by the Central Bank of Brazil that offers direct consumer credit, personal loans and credit insurance tied to the group’s retail sales. Grazziotin Financeira operates in an integrated way with the retail chains, with credit analysis and origination carried out directly at the points of sale, both for store credit and consumer financing operations. This setup allows the company to combine the sale of goods with financial services, increasing average ticket size and purchase frequency. Store credit and personal loans follow internal risk analysis policies and comply with prudential rules applicable to supervised institutions, in addition to being subject to consumer protection and data protection laws.

From a regulatory standpoint, Grazziotin operates in a sector which, in its retail activity, does not require specific authorizations beyond the standard commercial licenses, and is mainly subject to the Consumer Defense Code and data protection regulations, especially the General Data Protection Law (LGPD). Operations involving personal data, including store credit and online sales, have been adapted to LGPD requirements, with a focus on information security and responsible treatment of customer records. Grazziotin Financeira, as a financial institution, is regulated and supervised by the Central Bank, with specific authorization and foreign equity participation recognized by a federal decree in 2018.

In environmental, social and governance (ESG) practices, the company reports initiatives related to responsible management of its supply chain and agricultural and forestry production. Suppliers are subject to labor, social security, tax and environmental compliance criteria, with contractual clauses on ethics, integrity and a ban on child labor or degrading working conditions, complemented by technical visits and field audits. In agriculture, Grato Agropecuária holds certification for its cotton production, aligning with sustainability and traceability requirements valued by domestic and international buyers. The reforestation track record in Piratini reflects a focus on plantation forestry assets, with attention to environmental and contractual obligations in timber sales. In terms of transparency, Grazziotin publishes an annual ESG report and is in the process of adapting to incorporate international sustainability reporting standards, such as IFRS S1 and IFRS S2, adding layers of governance to the monitoring of social and environmental risks and impacts associated with its activities.