Grupo Mateus Q4 2025 Earnings: What Happened
Grupo Mateus S.A. (GMAT3) is Brazil’s largest food retailer with entirely domestic capital and the country’s third-largest food retailer overall, operating across nine states in the North and Northeast — Maranhão, Pará, Piauí, Tocantins, Ceará, Pernambuco, Bahia, Sergipe, and Alagoas — through a multi-format model spanning atacarejo (cash-and-carry), supermarkets, hypermarkets, wholesale B2B distribution, electronics (Eletro Mateus), bakeries (Bumba Meu Pão), and the newly launched Mateus Foodservice and Spazio formats. Founded in 1986 by Ilson Mateus Rodrigues in Balsas, Maranhão, the group went public in 2020. Grupo Mateus Q4 2025 earnings are covered by The Rio Times as part of its Latin American financial news reporting on B3-listed consumer companies.
The headline 20.9% revenue growth to R$10.55 billion ($2.0B) masks a troubling underlying dynamic. Stripping out the contribution from the Novo Atacarejo joint venture (36 stores consolidated from Q3 2025, 51% stake) and new organic openings, same-store sales were negative for the first time in recent history at -1.1%. The cash-and-carry format — the company’s core growth engine — saw SSS of -5.5%, and supermarkets declined -5.1%. Only wholesale B2B (+21.5%) and the shrinking Eletro segment (+7.8%) posted positive same-store growth. Management attributed the weakness to food deflation, rising household indebtedness, and a consumer shift toward lower-ticket items.
Shares of GMAT3 traded around R$5.04, down approximately 19% over 12 months, with a P/E of approximately 6.2x and a trailing dividend yield of about 4.9% — a valuation that reflects the market’s concern about SSS deceleration, the complexity of the Novo Atacarejo integration, the audit flags on inventory controls, and the unresolved R$1.05 billion ($201M) tax dispute with Brazil‘s Federal Revenue Service over ICMS credit exclusions from 2014–2021.
Key Drivers Behind Grupo Mateus’s Q4 2025 Results
Novo Atacarejo Integration
The Novo Atacarejo joint venture, announced in May 2024, is the most transformative deal in Grupo Mateus’s history. The partnership integrates 36 Novo Atacarejo stores (primarily in Pernambuco and Paraíba) with Grupo Mateus’s existing network, creating combined gross revenue of approximately R$6.8 billion ($1.3B) and giving Grupo Mateus a 51% controlling stake. Consolidation began in Q3 2025, adding approximately R$1.5 billion ($287M) in quarterly revenue — which is why the 20.9% Q4 revenue growth figure overstates organic performance. Without Novo, Q3 revenue growth was approximately 12%, suggesting that Q4’s organic growth was likely in the low-teens or below, consistent with the negative SSS reading.
The integration brought margin pressure. XP noted that Novo’s gross margin declined 0.3 percentage points quarter-over-quarter, and the absorption of fixed costs from the JV — particularly additional headcount of R$16 million for infrastructure — weighed on EBITDA margins. The R$39.6 million ($8M) Refis de Pernambuco expense was directly tied to settling historical ICMS tax debts inherited through the Novo structure, a cleanup cost that management chose to absorb upfront rather than carry forward.
Eletro Exit and Format Restructuring
The most decisive strategic move of 2025 was the systematic exit from electronics retail. Grupo Mateus closed 28 standalone Eletro Mateus stores during the year (13 in Q4 alone) and discontinued the electronics department in 20 additional food retail locations. This is effectively a full withdrawal from a segment that had been a core part of the Grupo Mateus identity since the late 1990s. The closures generated R$23 million ($4M) in restructuring costs — a manageable one-time charge for a company generating R$38.4 billion in annual revenue.
The pivot makes strategic sense. Brazil’s electronics retail sector has been structurally challenged by e-commerce competition (Mercado Livre, Amazon, Casas Bahia) and compressed margins on appliances. By reallocating capital from underperforming Eletro stores to food retail expansion and the new Mateus Foodservice format (targeting restaurants and institutional buyers) and Spazio (a new concept store), management is shifting the portfolio toward higher-frequency, more defensible categories where Grupo Mateus’s regional distribution advantage is more durable.
Consumer Weakness in North/Northeast
The negative SSS of -1.1% in Q4 reflects real demand deterioration in Grupo Mateus‘s core markets. The North and Northeast of Brazil are more dependent on government transfer payments (Bolsa Família), have higher household debt ratios, and are more sensitive to food price deflation — which paradoxically hurts grocery retailers by reducing the value of the average basket even as volumes hold flat or decline. The -5.5% SSS in cash-and-carry is particularly concerning because this format depends on small business buyers (restaurants, bars, small shops) whose purchasing power is under pressure from high interest rates and weakening consumer sentiment. Management’s Q2 SSS of +6.1% had suggested momentum; the collapse to -1.1% in Q4 signals a sharper-than-expected deceleration that may persist into 2026.
Grupo Mateus Q4 2025 Financial Detail
Revenue and Margins
Full-year revenue of R$38.4 billion ($7.3B) grew 19.8%, with the Novo Atacarejo consolidation accounting for a significant portion of the H2 acceleration (Q3 revenue was R$10.8B, +29% including Novo vs. +12% organic). Gross profit of R$2.4 billion ($459M) in Q4 grew 24.6% with margin expanding to 22.5%, a positive signal that the food-focused portfolio mix is delivering better economics than the blended result with Eletro. Full-year adjusted EBITDA (excluding extraordinary items) of R$2.8 billion ($535M) grew 16.8% with a 7.3% margin — respectable for Brazilian food retail but trailing the 8.0%+ margins achieved in Q2 and Q3.
The full-year net income of R$1.9 billion ($363M) grew an impressive 45.9%, though this figure includes non-recurring items. Excluding extraordinary effects, adjusted net income was R$1.57 billion ($300M), up 21.2% with a 4.1% margin — more representative of underlying profitability. The gap between the headline and adjusted figures reflects the complexity of the Novo consolidation, Eletro closures, inventory adjustments, and the Refis settlement.
Balance Sheet and Cash Flow
Consolidated net debt (including Novo Atacarejo) closed December at R$1.1 billion ($210M), down R$379.1 million from September, driven by the Q4 cash generation of R$379.1 million ($73M) — a notable improvement in working capital management after the inventory challenges that plagued Q3 2025 (which triggered material audit adjustments). The leverage ratio of approximately 0.4x net debt/EBITDA remains conservative by sector standards — Carrefour Brasil operates at roughly 2–3x, and Assaí at 3–4x — giving Grupo Mateus significant financial flexibility despite the R$1.05 billion ($201M) tax dispute overhang.
Management Signals from Grupo Mateus
Management attributed the weak same-store sales to three macro factors: food deflation compressing basket values, rising household indebtedness reducing purchasing power, and a consumer shift toward lower-ticket items. These are structural headwinds for any grocer operating in Brazil’s lower-income regions, and management’s transparency about the challenge is notable — this is a more cautious tone than the confident expansion narrative of earlier quarters.
The Eletro exit and launch of Mateus Foodservice and Spazio represent a deliberate portfolio reshaping. Foodservice targets the B2B channel (restaurants, hotels, institutional buyers) where Grupo Mateus’s distribution infrastructure in the North and Northeast provides a competitive moat — few national players have the cold-chain and logistics density to serve these markets efficiently. Spazio appears to be a new-format retail concept, though details remain limited.
A productivity program initiated in Q4 generated R$23 million ($4M) in one-time restructuring costs (primarily severance). This signals that management is not only cutting unprofitable formats but actively streamlining the existing cost base — a necessary response to the operational deleverage that occurs when SSS turns negative while fixed costs continue rising from new store absorptions and the Novo integration.
What to Watch Next for Grupo Mateus
Same-store sales recovery is the single most important metric for investors. The deceleration from +6.1% in Q2 to +2.9% for full-year to -1.1% in Q4 is a disturbing trajectory. If food price inflation returns (as many economists expect in H1 2026 given the weakening real), it would mechanically boost SSS — but the question is whether underlying volume trends are deteriorating independently of the pricing environment. Q1 2026 SSS data will be critical for distinguishing cyclical weakness from structural share loss to competitors.
The Novo Atacarejo integration timeline matters. The initial consolidation was completed in Q3 2025, but achieving synergies in procurement, logistics, and back-office operations typically takes 12–18 months. If Novo’s margins continue declining (0.3pp QoQ in Q4), it would suggest integration challenges are more persistent than expected. Conversely, margin recovery at Novo would validate the R$6.8 billion combined-revenue thesis and potentially support a re-rating.
The audit findings deserve ongoing monitoring. Forvis Mazars, the external auditor, flagged inventory control weaknesses requiring expanded audit procedures and divergences between accounting records and subsidiary controls on vendor rebate receivables. While the auditor ultimately issued an unqualified opinion on the 2025 financials, these flags — particularly coming after the material Q3 2025 inventory adjustments — suggest that internal controls are not yet at the standard expected for a R$11 billion ($2.1B) market-cap company. Remediation progress will be a governance checkpoint throughout 2026.
Grupo Mateus Quarterly Results (Q4 2025 vs Q4 2024)
| Metric | Q4 2024 | Q4 2025 | Chg |
|---|---|---|---|
| Net Revenue | R$8.73 bn | R$10.55 bn ($2.0B) | +20.9% |
| Gross Profit | R$1.93 bn | R$2.40 bn ($459M) | +24.6% |
| Gross Margin | 22.1% | 22.5% | +0.4pp |
| EBITDA (post IFRS16) | R$632.1 mn | R$612.5 mn ($117M) | −3.1% |
| EBITDA Margin | 7.2% | 5.8% | −1.4pp |
| NI (Controlling) | R$317.3 mn | R$324.3 mn ($62M) | +2.2% |
| Same-Store Sales | +5.9% | −1.1% | −7.0pp |
Grupo Mateus Annual and Store Summary (FY2025)
| Metric | Value |
|---|---|
| FY Net Income | R$1.9 bn ($363M) (+45.9%) |
| FY Adj. NI (ex-extraordinary) | R$1.57 bn ($300M) (+21.2%) |
| FY Revenue | R$38.4 bn ($7.3B) (+19.8%) |
| FY Adj. EBITDA | R$2.8 bn ($535M) (+16.8%), 7.3% margin |
| FY SSS (Consolidated) | +2.9% |
| Total Stores (Dec 2025) | 302 |
| 2025 Openings / Closures | +22 food retail / −28 Eletro |
| Net Debt (Consolidated) | R$1.1 bn ($210M), ~0.4x ND/EBITDA |
| Share Price (GMAT3) | ~R$5.04 ($0.96) |
| P/E | DY (12M) | ~6.2x | ~4.9% |
| States | Formats | 9 states | 6+ formats |
Risks Facing Grupo Mateus
Consumer weakness in the North/Northeast is the most immediate operational risk. These regions are disproportionately reliant on government transfer payments and consumer credit, making them more vulnerable in a high-interest-rate environment. If the Selic remains at 15% through H1 2026 and Bolsa Família adjustments lag inflation, the negative SSS trend could persist or worsen — particularly in the cash-and-carry format where small business buyers are the most credit-sensitive customer segment. A sustained -5% SSS in the company’s core format would fundamentally challenge the growth thesis.
The R$1.05 billion ($201M) tax dispute remains unresolved. Brazil’s Federal Revenue Service is challenging the exclusion of presumed ICMS credits from corporate income tax and social contribution bases for the period 2014–2021. If the assessment is upheld, it would represent a material liability — roughly equivalent to two-thirds of a full year’s adjusted net income. While XP analysts have noted that provisioning is not yet required given the company’s legal position, the risk is not zero, and any adverse ruling would immediately pressure the stock.
Internal control deficiencies flagged by the auditor are a governance risk. Forvis Mazars identified weaknesses in inventory controls and divergences in vendor rebate accounting — issues that, in the context of the Q3 2025 material inventory adjustments, suggest that the company’s internal systems have not scaled as fast as its store network. For a company that grew from 272 stores to 302 in one year while absorbing 36 Novo Atacarejo units, this is not surprising — but remediation is essential for investor confidence, particularly among institutional holders who weight governance quality in their investment frameworks.
Brazilian Food Retail Sector Context
Brazil’s food retail sector has undergone dramatic consolidation through M&A, with Carrefour Brasil absorbing Grupo BIG, Assaí spinning off from GPA, and now Grupo Mateus integrating Novo Atacarejo. The sector’s three largest cash-and-carry operators — Assaí, Atacadão (Carrefour), and Sam’s Club/Makro — have focused primarily on the wealthier Southeast and South, leaving the North and Northeast as Grupo Mateus’s competitive moat. JPMorgan has identified potential for 140 new store locations and 180 new cash-and-carry sites for Grupo Mateus in cities with over 100,000 inhabitants in these regions, suggesting a long expansion runway even without geographic diversification.
At approximately 6.2x P/E and 0.4x leverage, Grupo Mateus is far cheaper and far less leveraged than its peers. Assaí trades at 10–12x earnings with 3–4x leverage; Carrefour Brasil at similar or higher multiples with ongoing deleveraging pressure. The discount reflects both the SSS deterioration and the governance noise, but the Genial Investimentos “Buy” recommendation and BB Investimentos R$10.40 target suggest that sell-side consensus sees the negative SSS as cyclical rather than structural, with the Novo integration and Eletro exit creating a cleaner, more focused business by H2 2026.
The investment debate on Grupo Mateus comes down to whether its regional fortress model — dominant distribution in Brazil’s poorest regions, less competition from national chains, high-frequency food categories, and a founder-led culture — can overcome the macro headwinds that are currently compressing consumer spending in exactly the markets where the company operates. At R$5.04 per share and R$38.4 billion in annual revenue, the market is pricing in significant risk — the question is whether the Novo synergies, the Eletro exit savings, the Foodservice launch, and eventual food price inflation can reignite growth and margins before investor patience runs out.