C&A (CEAB3) in 2025: XP Investimentos Sees a Tougher Q3 but Stays Bullish on Long-Term Growth

• Why Is XP Investimentos Adjusting Its C&A Forecast?
• How Did C&A Perform in Q2 2025?
• What’s Driving C&A’s Store Productivity Gains?
• What Are the Risks and Opportunities Ahead?
• FAQs: Your C&A (CEAB3) Questions Answered

XP Investimentos has revised its projections for C&A (CEAB3), factoring in a challenging Q3 due to macroeconomic conditions and weather-related disruptions. Despite this, the brokerage remains optimistic about the retailer’s long-term prospects, citing strong Q2 performance and potential operational improvements. Key updates include a trimmed EBITDA outlook for 2025-26 but raised net profit expectations. The "buy" recommendation stands, with a target price of R$23 through 2026. Here’s a DEEP dive into the numbers and why XP believes C&A still has room to grow.

Why Is XP Investimentos Adjusting Its C&A Forecast?

XP Investimentos tweaked its estimates for C&A after analyzing Q2 results and macroeconomic trends. The brokerage anticipates a softer Q3, attributing it to unseasonably warm weather delaying winter purchases—historically concentrated in July–September. This shifts year-over-year comparisons, but XP expects a rebound in Q4. Analyst Danniela Eiger’s team marginally lowered EBITDA projections by 2.5%–5% for 2025–26, citing higher administrative costs and slower sales. However, net profit forecasts ROSE 7% for 2025, thanks to a projected 2% drop in financial expenses.

How Did C&A Perform in Q2 2025?

C&A reported a net profit of R$200.3 million in Q2, up 138.9% year-over-year. EBITDA (pre-IFRS 16) hit R$315.9 million, a 29.8% increase, driven by cost controls and the sale of a legacy partnership portfolio with Bradescard. Gross margins improved, and lower recovery losses pushed EBITDA margins to 15.3% (+2.1 percentage points). "The numbers show resilience," notes the BTCC research team, "but the real test is sustaining this into Q3."

What’s Driving C&A’s Store Productivity Gains?

Post-pandemic, C&A’s sales per square meter plummeted but recovered to 2019 levels by mid-2022. Since then, productivity has climbed 30%, though it still trails competitor Lojas Renner. "There’s room for further operational leverage," says Eiger. Store renovations and internal initiatives—like pricing and logistics tweaks—could boost margins. For context, Renner’s 2024 productivity was ~R$1,200/m² versus C&A’s ~R$900/m².

What Are the Risks and Opportunities Ahead?

Q3’s weak comps and rising costs could pressure short-term results.XP highlights C&A’s untapped potential in store efficiency and product mix. The R$23 price target assumes mid-single-digit annual sales growth and margin expansion to 16% by 2026. "If they execute on logistics, it’s a 20% upside," adds a BTCC analyst.

FAQs: Your C&A (CEAB3) Questions Answered

Why did XP lower C&A’s EBITDA forecast?

XP trimmed its 2025–26 EBITDA outlook by 2.5%–5% due to softer Q3 sales and higher operating expenses.

Is C&A stock still a "buy"?

Yes, XP maintains its "buy" rating with a R$23 target, citing productivity gains and cost controls.

How does C&A compare to Lojas Renner?

C&A’s store productivity lags Renner’s by ~25%, but XP believes reforms could close the gap.