Magazine Luiza (MGLU3) Q1 2026 earnings summary

Executive summary

• Total ecosystem sales reached R$15.2 billion in 1Q26, with physical stores growing up to 7% year-over-year and expanding market share, while e-commerce sales declined 11% due to cost pressures and margin prioritization.

• EBITDA was R$718 million (7.8% margin), and operating cash flow over the last twelve months totaled R$2.0 billion, reflecting strong cash generation and disciplined expense management.

• Ecosystem brands such as KaBuM!, Netshoes, and Galeria Magalu delivered solid results and contributed notable net income.

• The company operates 1,245 stores and 21 distribution centers, maintaining a broad digital and physical retail presence across Brazil.

• The quarter marked a new strategic cycle focused on profitability, operational discipline, innovation, and ecosystem growth.

Financial highlights

• Gross margin stood at 30.8%, up 0.2 p.p. year-over-year, with gross profit at R$2.83 billion on R$9.21 billion net revenue.

• Adjusted EBITDA reached R$718 million (7.8% margin), and adjusted net result was a loss of R$34 million, impacted by higher financial expenses from increased CDI rates.

• Total cash position was R$6.2 billion, with adjusted net cash of R$1.2 billion.

• Operational cash generation reached R$2.0 billion in the last twelve months.

• Working capital improved by R$0.6 billion year-over-year, mitigating higher financial expenses.

Outlook and guidance

• The company expects the second quarter to benefit from FIFA World Cup seasonality, with increased sales in TVs, soundbars, and sports merchandise.

• Strategic focus remains on profitability, operational efficiency, omnichannel expansion, and leveraging artificial intelligence.

• Continued investment in ecosystem expansion, digital transformation, and financial services, including MagaluPay.

• Online growth initiatives include agentic e-commerce, app enhancements, and expanded B2B partnerships.

• Ongoing scenario analyses and compliance preparations for Brazil's tax reform.