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Introduction & Market Context
Raia Drogasil S.A. (RADL3), Brazil’s largest pharmacy chain, presented strong third-quarter 2025 results on November 5, highlighting significant digital growth and market share expansion. The company continues to strengthen its position in Brazil’s pharmaceutical retail sector through its omnichannel strategy, with digital sales now representing over a quarter of retail revenue.
The pharmacy retailer operates 3,453 stores nationwide and serves 51 million active customers, representing approximately 25% of Brazil’s population. This extensive reach has enabled Raia Drogasil to capitalize on the growing demand for pharmaceutical products while successfully transitioning to an increasingly digital business model.
Quarterly Performance Highlights
Raia Drogasil reported consolidated gross revenue of R$12.1 billion for Q3 2025, representing a 12.7% increase year-over-year. Retail operations showed even stronger performance with 15.5% growth, while the company’s specialty division 4Bio experienced a 16.8% decline.
As shown in the following revenue growth chart, the company has demonstrated consistent acceleration throughout 2025, with consolidated revenue growth improving from 6.3% in Q1 to 12.7% in Q3:
Same-store sales growth reached 7.3% in Q3 2025, significantly outperforming the 4.6% recorded in the same period last year. Notably, mature store sales growth was even stronger at 7.8%, indicating that established locations are gaining momentum. The company attributes 3.1 percentage points of this growth to CMED price adjustments, with the remaining 4.7 percentage points representing real growth.
Adjusted EBITDA increased by 12.2% to R$909 million, maintaining a stable margin of 7.5%. Adjusted net income grew by 19.3% to R$402 million, with margin expanding by 0.2 percentage points to 3.3%. The company generated R$648 million in positive free cash flow, contributing to a reduction in net debt.
Digital Transformation Success
The most impressive aspect of Raia Drogasil’s Q3 performance was its digital transformation. Digital sales surged 62% year-over-year to R$3 billion, now representing 26.7% of retail gross revenue. This dramatic growth underscores the success of the company’s omnichannel strategy.
The company’s digital channel mix reveals that 81% of digital sales now come through its proprietary app, demonstrating strong customer adoption and loyalty:
Delivery efficiency has become a key competitive advantage, with 97% of digital orders collected or delivered within 60 minutes. The company’s click-and-collect model remains dominant, accounting for 69% of digital sales, while up-to-60-minute delivery represents 22% of the digital mix.
CEO Renato Raduane emphasized the company’s digital investments during the earnings call, noting that "many players don’t have the financial capacity to do the same," highlighting Raia Drogasil’s competitive advantage in the digital space.
Market Share Expansion
Raia Drogasil continues to strengthen its leadership position in Brazil’s pharmaceutical retail market. National market share increased by 0.8 percentage points year-over-year to reach 16.8% in Q3 2025. The company recorded market share gains across all regions of Brazil, with particularly strong performance in São Paulo, where market share expanded from 28.4% to 30.3%.
The following chart illustrates the company’s market share growth by region:
The company’s strategic store expansion continues to support market share growth. During the quarter, Raia Drogasil opened 88 new pharmacies while closing 6 underperforming locations, bringing its total store count to 3,453 units nationwide.
Financial Analysis
Raia Drogasil maintained gross profit margin stability at 27.4% of gross revenue in Q3 2025, unchanged from the previous quarter but slightly lower than the 27.5% recorded in Q3 2024:
The company demonstrated effective cost control, with selling expenses held at 17.3% of gross revenue and general and administrative expenses reduced to 2.6%. This disciplined approach to expenses, combined with revenue growth, contributed to the expansion in EBITDA and net income margins.
Adjusted EBITDA reached R$909.3 million in Q3 2025, representing 7.5% of gross revenue - an improvement from 6.9% in the same period last year:
Free cash flow generation remained strong at R$648 million, enabling the company to reduce its net debt from R$3.94 billion in Q2 2025 to R$3.38 billion. Financial leverage improved to 1.1x adjusted EBITDA, down from 1.3x in the previous quarter:
Strategic Outlook
Looking ahead, Raia Drogasil remains focused on six strategic pillars: consistent execution and sustainable growth; omnichannel and digitalization; margin management and operational efficiency; expansion and market share; financial robustness and cash generation; and risk management and transparency.
The company is preparing for the upcoming Black Friday with an enhanced strategy and anticipates significant expansion in the GLP-one drug market, particularly with the entry of generics. During the earnings call, CEO Raduane expressed confidence in the company’s future, stating, "We believe that the best is still to come."
Raia Drogasil has announced an upcoming Investor Day on December 1st, where management is expected to provide more details on long-term strategic initiatives and growth targets.
While the company faces potential challenges including market saturation risks, supply chain issues, and macroeconomic pressures in Brazil, its strong digital positioning and continued market share gains suggest Raia Drogasil is well-positioned to maintain its leadership in Brazil’s pharmaceutical retail market.
Full presentation:
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