Centauro Lifts Brazil’s Grupo SBF Earnings as Fisia Drags on Q12025 Growth Amid Nike Wholesale Slump

Grupo SBF, Brazil’s leading sports retail group, reported a 4% annual revenue increase to R$1.55 billion ($277 million) in Q1 2025, according to its earnings release.

The mixed results highlighted stark contrasts between its Centauro and Fisia divisions, revealing both resilience and operational growing pains. Centauro, the company’s flagship athletic chain, drove growth with an 11.2% revenue jump to R$821.4 million ($147 million).

Physical store sales rose 8%, while digital channels surged 24.5%, aided by promotional tactics like mixed-coupon discounts. Gross margins expanded to 50.7% as full-price sales dominated, and same-store sales climbed 10.9% for physical locations, reaching 13.2% when including online orders.

The division’s success stemmed from tighter inventory control and a 7% increase in items per transaction. Fisia, Grupo SBF’s Nike-exclusive distributor, faced headwinds with a 5.9% revenue drop to R$825.3 million ($147 million).

Wholesale orders plummeted 18.9% as retailers adjusted to reduced discounts from prior quarters. Direct-to-consumer sales provided modest relief, growing 1.5% with a 52% gross margin across owned stores and e-commerce.

Same-store sales fell 1.2% overall, worsening to -3.4% in Nike Value Stores, though management expects wholesale recovery by late 2025. The group’s net debt fell 44.9% year-over-year, slashing leverage to 0.61x EBITDA from 1.33x in Q1 2024.

Grupo SBF Navigates Retail Shifts Amid Fisia Reset

This financial tightening boosted net margins to 4.5%, with adjusted net profit reaching R$69.2 million ($12 million). EBITDA declined 4.9% to R$222.1 million ($40 million) due to Fisia’s wholesale contraction, though administrative expenses dipped to 6.3% of revenue.

Negative cash flow of R$24 million ($4 million) reflected a 15% capex hike targeting store upgrades and a new Fisia distribution center near São Paulo. The facility’s tax incentives aim to offset currency risks from Nike imports, which account for 60% of Fisia’s inventory.

Grupo SBF repurchased 1.2 million shares during the quarter, signaling confidence amid a 7.3x forward P/E ratio that analysts deem undervalued. Centauro’s digital push now contributes 38% of its sales, up from 32% a year ago, while Fisia’s online share held steady at 28%.

The divergence underscores broader retail shifts: Centauro capitalized on Brazil’s fitness boom through localized promotions, while Fisia grappled with Nike’s global inventory rebalancing.

Investors are watching how Grupo SBF manages Fisia’s wholesale reset and Centauro’s expansion into smaller cities. With net debt at a manageable R$820 million ($146 million) and same-store sales trends stabilizing, the firm aims to leverage its dual-brand strategy.

It plans to capitalize on the 2025 back-to-school and holiday seasons. Market reactions remain cautious, but improved working capital and buyback momentum suggest latent upside if execution holds.

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