Pague Menos Posts Record 6.5% EBITDA Margin and Cuts Financial Leverage to 1.8x in Q2 2026

Pague Menos (PGMN3), one of the largest pharmaceutical retail chains in Brazil, reported adjusted net income growth of 22.2% year-over-year to R$ 73.6 million for the second quarter of 2026, fueled by a record high in operating profitability. The company’s Adjusted EBITDA margin reached an all-time high of 6.5%, up from 6.1% in the same quarter last year, marking a decisive shift toward structural profitability despite a recent slowdown in top-line growth.

The record operating margin was driven primarily by successful expense dilution as the company continues to extract efficiencies from its recent integration efforts and mature its store base. Crucially, the pharmaceutical retailer continued its trend of balance sheet improvement: financial leverage, measured by Net Debt to Adjusted EBITDA, fell for the twelfth consecutive quarter, dropping significantly from 2.6x to 1.8x. This deleveraging is seen by the market as a crucial step in normalizing the balance sheet following the acquisition of Extrafarma.

The focus on operational efficiency and debt reduction validates the thesis of several analysts who recently upgraded the B3 stock. Brokerages have noted that Pague Menos is a "self-help story" whose earnings momentum is tied to margin recovery and the reduction of financial risk. The significant drop in leverage to below 2.0x is a material change in the risk profile for the company, which traded on the São Paulo exchange at R$ 3.18 at the end of last week. For comparison, the broader Brazil stock market (IBOV) traded relatively flat today, closing near 178,000 points.

Moving forward, investors will be watching for two key metrics: the continued stabilization of margins and the trajectory of capital allocation now that the leverage target is within sight. The company has focused on accelerating store openings and expanding high-margin services, such as digital and vaccination offerings, which management anticipates will further drive profit growth. The primary factor determining whether the PGMN3 stock can sustain momentum will be the company’s ability to convert this record margin performance into sustained net profit growth over the second half of the year.