(Bloomberg) -- Brazilian retailer Grupo Casas Bahia SA expects to turn a profit again next year now that it’s worked out a deal with creditors, with its top executive signaling that forecast may even be too conservative.

“When we put together the restructuring plan, the idea was to have a profitable company from 2025. But there is a chance to bring that forward,” Chief Executive Officer Renato Franklin said in an interview Wednesday. “With good expectations for the second quarter, we can say results expected for the end of the year could be anticipated.”

Casas Bahia, one of Brazil’s most popular retail chains, posted a net loss of 261 million reais ($51 million) in the first quarter this year. That’s narrower than the 375 million-real loss expected in a Bloomberg survey and an improvement on the 297 million-real loss in same period a year earlier. 

Shares in the company were up as much as 4.5% in Sao Paulo on Thursday morning. 

The company filed an out-of-court deal with its main creditors in late April to reschedule the payment of 4.1 billion reais in debt. The plan includes a 24-month grace period for interest payments and 30 months for the payment of the company’s main debt. “This increases our breathing room and allows us to focus on the company,” the CEO said.

Analysts view even the official forecast for a profit in 2025 with skepticism. They project that Casas Bahia will have net losses until 2027, according to estimates compiled by Bloomberg.

Retailers in Brazil have been crushed by online competition from the likes of MercadoLibre Inc. and Shein Group Ltd. Many took on debt to improve their e-commerce logistics and infrastructure, then struggled when interest rates rose in the battle against inflation.

Franklin cited positive furniture sales data, improved credit-card issuance and optimism about Mother’s Day results, as well as progress on cost reduction and successful negotiations with creditors, as reasons to anticipate an upside surprise in coming months.

He said the company has already finished closing stores and is carrying out large liquidations to clear stock, which gave it “cleaner” results in the first quarter and took pressure off margins. Casas Bahia’s gross margin was 30% in the first three months of 2024.

Franklin said improved macroeconomic conditions would also act as a tailwind, but said Casas Bahia isn’t counting on that. “The plan is to make a profit with this scenario of repressed demand and high rates,” he said, adding that the retailer works with a benchmark Selic rate of 10% over a 12-month period.

(Updates with share move in the 4th paragraph)

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