Brazil’s Magazine Luiza Reports 37% Increase in Fourth-Quarter Profit

Magazine Luiza reported a 37% increase in Q4 adjusted profit to 139.2 million reais, exceeding analyst forecasts. Its EBITDA rose by 12%, and net revenue reached 10.8 billion reais. The retailer aims to enhance margins and transition to a new strategy focused on artificial intelligence by 2025.

Magazine Luiza, a prominent Brazilian retailer, announced on Thursday that its adjusted net profit for the fourth quarter was 139.2 million reais (approximately $24 million), marking a notable increase of 37% from the previous year. This profit also surpassed the projections made by analysts, who had anticipated a profit of 126.9 million reais.

In terms of core earnings, which refer to adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), the company reported an increase of about 12% year-on-year, reaching 846.2 million reais, slightly exceeding estimates of 845.9 million reais. The adjusted EBITDA margin also witnessed an improvement, rising by 0.6 percentage points to 7.8% from the same quarter in 2023.

Magazine Luiza’s net revenue reached 10.8 billion reais, reflecting a year-on-year growth of 2.3%, supported by a 2.6% rise in total sales encompassing both physical stores and e-commerce operations.

Vanessa Rossini, the director of investor relations, stated, “Our main focus continues to be on expanding our margins,” while expressing optimism about further profitability growth in 2025 following last year’s gains. The earnings report indicates that 2025 will mark the conclusion of the strategic cycle initiated in 2021, as the company prepares for a new cycle with an emphasis on artificial intelligence.

In summary, Magazine Luiza has successfully reported a 37% increase in its fourth-quarter adjusted profit, surpassing analysts’ expectations. With significant growth in EBITDA and net revenue, the company exhibits a strong operational performance. Looking ahead, Magazine Luiza aims to enhance its profitability and transition towards a strategic focus on artificial intelligence, as it concludes its current strategic cycle by 2025.

Original Source: www.tradingview.com