Lojas Quero Quero S A : Dados Econômico-Financeiros

RESULTS 3Q22

October 31rst, 2022

RESULTS WEBCAST

November 1rst, 2022 (Tuesday)

Time: 9 a.m. (Brasília) | 8 a.m. (New York) | 1 p.m. (London)

Webcast in Portuguese|Webcast in English(simultaneous translation)

Lojas Quero-Quero S.A.

B3: LJQQ3

3Q22 RESULTS RELEASE

Cachoeirinha, October 31rst, 2022.

Gross Revenue, Net of Returns and Rebates grew 3.6% in the quarter (+59.7% vs. 3Q19) and 5.3% in 9M22 (+64.7% vs. 9M19, equivalent to a CAGR of 18.1%), totaling R$691.9 million and R$1,919.2 million, respectively in 3Q22 and 9M22. When compared to the pre-pandemicperiod (2019), the Same Store Sales (SSS) indicator maintained the high growth rate of 29.4% in SSS (+64.5% in total Retail sales), similar to the growth in 1H22 vs. 2019 (+28.5%), but showed a reduction in 3Q22 vs. 3Q21 of 7.6%, depending on the basis of comparison (+4.6% in 3Q21 and +35.4% in 3Q20).

Gross Profit totaled R$189.0 million in 3Q22 (+34.6% vs. 3Q19) and R$561.2 million in 9M22 (+49.3% vs.

9M19). Comparable gross margin (% of RBLD) was 27.3% in 3Q22, resulting from a more aggressive and promotional competitive environment, and higher interest rates that pressured the retail and financial services margin.

Operating Expenses totaled R$173.2 million in the quarter, 6.8% higher vs. 3Q21 and R$505.9 million in 9M22, an increase of 10.8% over the previous year, we continue to demonstrate good control of expenses; even considering (i) the high inflation scenario and (ii) investments in expansion (15.7% increase in the store base vs. 3Q21) and in new projects, both have not yet been fully reflected in the comparison basis.

EBITDA was R$43.1 million in 3Q22 and R$132.5 million in 9M22. Adjusted EBITDA was R$20.4 million in the quarter and R$68.5 million in 9M22.

Adjusted Net Income totaled a loss of R$3.2 million in 3Q22 and a loss of R$9.1 million in 9M22, excluding the impacts of the Stock Option Plan (SOP) and IFRS-16.The reported net loss was R$7.6

million in 3Q22 and R$22.3 million in 9M22.

Operating cash generation in the quarter, reducing Adjusted Net Debt from R$230.9 million in 2Q22 to R$196.4 million at the end of 3Q22. The main cash generation factor was the improvement in the dynamics between inventories and suppliers in the period.

HIGHLIGHTS

			% 3Q22		% 3Q22			% 9M22		% 9M22
Consolidated Information (R$ million)	3Q22	3Q21	vs 3Q21	3Q19	vs 3Q19	9M22	9M21	vs 9M21	9M19	vs 9M19
Gross Revenue, Net of Returns and Rebates	691.9	668.0	3.6%	433.3	59.7%	1,919.2	1,822.8	5.3%	1,165.1	64.7%
Net Operating Revenue¹	601.2	538.7	11.6%	348.8	72.3%	1,697.6	1,470.2	15.5%	953.3	78.1%
Gross profit	189.0	207.3	(8.9%)	140.4	34.6%	561.2	578.5	(3.0%)	375.9	49.3%
Gross Margin (% Net Revenue)	31.4%	38.5%	(7.1)p.p.	40.2%	(8.8)p.p.	33.1%	39.3%	(6.3)p.p.	39.4%	(6.4)p.p.
Gross Margin (% Gross Revenue)	27.3%	31.0%	(3.7)p.p.	32.4%	(5.1)p.p.	29.2%	31.7%	(2.5)p.p.	32.3%	(3.0)p.p.
Operating expenses	(173.2)	(162.2)	(6.8%)	(104.9)	(65.2%)	(505.9)	(456.5)	(10.8%)	(299.0)	(69.2%)
EBITDA	43.1	66.6	(35.4%)	48.0	(10.4%)	132.5	181.7	(27.1%)	113.0	17.2%
EBITDA Margin (% Net Revenue)	7.2%	12.4%	(5.2)p.p.	13.8%	(6.6)p.p.	7.8%	12.4%	(4.6)p.p.	11.9%	(4.1)p.p.
EBITDA Margin (% Gross Revenue)	6.2%	10.0%	(3.8)p.p.	11.1%	(4.9)p.p.	6.9%	10.0%	(3.1)p.p.	9.7%	(2.8)p.p.
Adjusted EBITDA²	20.4	49.9	(59.2%)	36.1	(43.5%)	68.5	136.2	(49.7%)	78.8	(13.0%)
Adjusted EBITDA Margin (% Net Revenue)	3.4%	9.3%	(5.9)p.p.	10.3%	(6.9)p.p.	4.0%	9.3%	(5.2)p.p.	8.3%	(4.2)p.p.
Adjusted EBITDA Margin (% Gross Revenue)	2.9%	7.5%	(4.5)p.p.	8.3%	(5.4)p.p.	3.6%	7.5%	(3.9)p.p.	6.8%	(3.2)p.p.
Net Income	(7.6)	15.6	N/A	13.3	N/A	(22.3)	43.1	N/A	14.2	N/A
Net Margin (% Net Revenue)	(1.3%)	2.9%	(4.2)p.p.	3.8%	(5.1)p.p.	(1.3%)	2.9%	(4.2)p.p.	1.5%	(2.8)p.p.
Net Margin (% Gross Revenue)	(1.1%)	2.3%	(3.4)p.p.	3.1%	(4.2)p.p.	(1.2%)	2.4%	(3.5)p.p.	1.2%	(2.4)p.p.
Adjusted Net Income (ex-SOP & ex-IFRS16)	(3.2)	20.7	N/A	13.8	N/A	(9.1)	57.0	N/A	15.8	N/A
Adjusted Net Margin ex-SOP & ex-IFRS16 (% Net Revenue)	(0.5%)	3.8%	(4.4)p.p.	3.9%	(4.5)p.p.	(0.5%)	3.9%	(4.4)p.p.	1.7%	(2.2)p.p.
Adjusted Net Margin ex-SOP & ex-IFRS16 (% Gross Revenue)	(0.5%)	3.1%	(3.6)p.p.	3.2%	(3.6)p.p.	(0.5%)	3.1%	(3.6)p.p.	1.4%	(1.8)p.p.
Same Store Sales Growth (SSS)	(7.6%)	4.6%		4.9%		(6.9%)	23.3%		5.7%

1. As of 2Q19, NOR (Net Operating Revenue) includes the effect of the change in the ICMS-ST/RS legislation (decree No. of ICMS-ST/RS (decree No. 56.150/2021).
2. Adjusted EBITDA is a non-accounting measure of the Company that corresponds to EBITDA plus non-recurring or non-operating items, less the impact of IFRS16/CPC06 (R2) as of 2019.

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MESSAGE FROM THE MANAGEMENT

In the third quarter, Lojas Quero-Quero reached new important stages in its continuous growth trajectory. We opened the Company's 500th store, in the city of Nova Andradina - MS, a milestone that highlights not only its growth, but the many opportunities for the future, which go beyond the borders of the southern region of Brazil. With this inauguration, we celebrate ours 55th anniversary that, in essence, maintains the construction of lasting relationships with small and medium-sized countryside communities. This is only possible thanks to the dedication and commitment of our employees and all those who have contributed to our history over the years. Also, during the quarter, we were proud to receive two distinctions that illustrate our values and feelings as a Company. We were recognized by the Great Place to Work ranking as one of the 150th best companies to work for in Brazil, and ranked 1st in the 2022 IBEVAR- FIA Ranking, as the most admired company by its employees among Brazil construction material retailers.

During these 55 years of history, our objective has been and continues to be to offer our customers a complete home and construction solution, through strategies supported by the Company's pillars. In this way, like the other quarters, we maintained our investment with a view to the long term. We opened 16 new stores, totaling 44 stores throughout the year, in line with the 45 store openings in the same period of last year. In addition to the 500th store milestone, we reached 509 stores operating in more than 400 cities at the end of September. Although our focus, in the short term, remains on the Brazil's southern states where we see opportunities to expand to 160 more cities, we continue to gradually invest in the states of Mato Grosso Sul and São Paulo, where we have already reached 17 stores in operation.

The main macroeconomic indicators did not improve during the first half of the year, mainly in relation to consumption and consumer income, which was reflected in a challenging scenario for retail. At the same time, we have a strong comparison basis for sales, as a result of our strong performance between 3Q20 and 2Q21, when we gained market share, with an average growth of 34.9% in same-store sales (SSS). We achieved total retail sales growth of 64.5% in 3Q22 vs. 3Q19, representing a CAGR of 18.1% since 2019. That said, our performance is in line with what we had in the first half of the year, and we ended the first nine months (9M22) with a growth of 65.1% vs. 9M19, a period that for us represents a more adequate basis for comparison, due to the impact of the pandemic.

In the quarter, sales showed a total growth of 0.2% compared to the previous year, and a same store sale

1. decrease of 7.6% - an improvement, albeit subtle, when compared to the previous quarter. In general, the sales performance of the different categories was similar, although some performed below the historical average in last year's third quarter (3Q21). Thus, the current scenario has proved to be more

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challenging than we initially expected, with a more competitive and promotional environment. This means that we have more pressured retail margins, unlike the quarters of strong demand and higher consumer disposable income, in which we achieved margins above the Company's history. With the intention of obtaining greater sales leverage in the third quarter, we chose to take a more promotional stance. However, given the return observed in sales, which, as mentioned earlier, remained very similar to previous quarters, we decided to gradually reduce promotions starting in September.

Therefore, we improved promotional strategies in order to leverage sales of the figital project, seeking to familiarize our customers more and more with this new format and with the new categories that we have included in our product mix. As a result of these actions, at the end of the quarter, figital sales represented 19% of the Company's sales, showing a consistent evolution each quarter. As a result, the project continues to demonstrate its potential and will be an important lever for sales growth in the medium and long term.

On the other hand, the performances of the Financial Services and Credit Card activities remained consistent throughout 2022, resuming their growth after a period in which both activities were impacted by the higher disposable income of our customers. This scenario meant that, throughout 2020 and 2021, there was a reduction in the demand for credit and in the default of portfolios. Today, despite the more challenging scenario than that experienced in 2019, the level of arrears of more than 90 days in the portfolio has remained in line with the level observed in that year, specifically at 11.8%, slightly below 2Q22, - a reflection of the constant improvements in our credit and collection operations, and a more conservative approach to granting credit. The VerdeCard card's total net portfolio grew 15.9% in the quarter vs. 3Q21, while the volume transacted grew 11.1%, with the growth of use inside and outside our stores. In this way, we continue to see an increase in the penetration of the VerdeCard card in retail sales, but still at levels lower than the pre-pandemic period.

In light of the current macroeconomic scenario, our efforts also focused on controlling the pace of growth in expenses. Even with the maintenance of the pace of expansion, the effort made to optimize expenses and renegotiate with suppliers, allowed us to achieve a total growth of expenses similar to the IPCA accumulated in the last twelve months. At the same time, we are reaching a normalized level of investments, which had been intensified with (i) the inauguration of the two new Distribution Centers, which are now completing one year of operation, and (ii) with the Figital platform, whose implementation was accelerated throughout the second half of 2021.

One data that reflects this attitude is the operating cash generation presented in this quarter. In the last two quarters, we reduced our adjusted net debt, even considering the continuous investments in expansion. Operating cash flow has always been a priority for the Company, and the initiatives adopted this year, referring to working capital, expenses and investments, contribute to this result. Given the additional investments made in the last twelve months, and the sales performance, we went through a period of operational deleveraging, with impacts on EBITDA and Net Result, however the initiatives adopted help to mitigate these impacts, and allow us to deliver nominal results in line with seen in 1Q22, although still below the company's potential. At the beginning of this quarter, we issued two new senior series of FIDC Verdecard, totaling R$300 million, with the brAAA rating maintained by S&P Global Ratings.

This quarter, we released our Sustainability Report for the year 2021. Historically, we have adopted several initiatives aimed at increasingly sustainable growth, and we started to disclose and categorize them within the best ESG parameters in this report. Among the numerous initiatives, in addition to the recognitions from GPTW and IBEVAR mentioned above, we also received the silver seal in our emissions inventory, carried out in partnership with the Brazilian GHG Protocol Program - FGV, evolving from the bronze seal, which we received the previous year, and we are happy to once again have been recognized and cited in the Institutional Investor Latin America Small Caps ranking, among the top three retail companies in the event categories for analysts and investors, CFO, and especially ESG. Furthermore, we

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are in the final phase of implementation of photovoltaic generation farms, which will be able to supply a large part of our current electricity consumption.

We continue with our growth strategy designed over the last few years, which began 55 years ago in a small town in the countryside, adapting when necessary, and without losing focus on the long term. We would like to once again thank those who have somehow contributed throughout this history so that Lojas Quero-Quero has reached the current level, shareholders, employees and their families, communities, customers and suppliers, and invite everyone to continue building the company of our dreams.

Clockwise: (i) Ivinhema - MS branch facade; (ii) Cambé - PR branch facade; (iii) Façade of the Presidente Venceslau - SP branch; (iv) Facade of the Reserva branch - PR; and (v) Facade of the Nova Andradina - MS branch.

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