Magazine Luiza Reports 37% Increase in Fourth-Quarter Adjusted Profit

Magazine Luiza reported a 37% increase in fourth-quarter adjusted net profit at 139.2 million reais ($24 million), surpassing analysts’ expectations. Core earnings (EBITDA) rose by 12% to 846.2 million reais, and revenue stood at 10.8 billion reais. The company aims to further improve profit margins and focus on artificial intelligence strategies by 2025.

Brazilian retailer Magazine Luiza (MGLU3) announced on Thursday that its adjusted net profit for the fourth quarter reached 139.2 million reais ($24 million), reflecting a 37% increase compared to the previous year. This figure surpassed the expectations of analysts, who predicted a profit of 126.9 million reais, indicating a strong quarterly performance.

The company reported a significant growth in its core earnings, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rising around 12% year-over-year to 846.2 million reais. This also aligned closely with analysts’ estimates of 845.9 million reais. Adjusted EBITDA margins improved by 0.6 percentage points from the same period in 2023, reaching 7.8%.

In terms of net revenue, Magazine Luiza recorded 10.8 billion reais, which marked a 2.3% increase year-over-year. Total sales, which included both physical retail and e-commerce operations, saw a growth of 2.6% during this period, further showcasing the company’s resilience in a competitive market.

Vanessa Rossini, the director of investor relations, remarked, “Our main focus continues to be on expanding our margins,” indicating an optimistic outlook for profitability growth in 2025. Additionally, Magazine Luiza’s earnings report stated that 2025 would conclude its strategic cycle initiated in 2021, as the company prepares for a new phase centered around advancements in artificial intelligence.

In conclusion, Magazine Luiza exhibited robust financial performance in the fourth quarter, highlighted by a 37% increase in adjusted net profit and a notable rise in core earnings. The company’s strategic focus on margin expansion and future initiatives revolving around artificial intelligence point to a promising outlook for profitability. Overall, Magazine Luiza’s solid revenue growth underscores its position as a leading retailer in Brazil.

Original Source: www.tradingview.com