Magazine Luiza (MGLU3) Q2 2024 earnings summary

Executive summary

• EBITDA grew 62% year-over-year to R$711 million with a 7.9% margin, the highest since 2019, and net income reached R$37 million in 2Q24, marking a return to profitability.

• Total sales reached R$15.4 billion, up 4.5% year-over-year, with physical stores delivering 14–16% same-store sales growth and e-commerce sales totaling R$10.8 billion.

• Strategic partnership with AliExpress/Alibaba launched, expanding cross-border assortment and expected to drive significant 1P and 3P sales growth.

• Net cash position improved by R$1.1 billion year-over-year, ending 2Q24 at R$2.0 billion after eliminating short-term debt.

• Gross margin increased by 2.1 p.p. to 30.9%, driven by merchandise and service revenue growth.

Financial highlights

• Adjusted EBITDA reached R$710.7 million, up 61.6% year-over-year, with a margin of 7.9% (+2.8 p.p.).

• Adjusted net income was R$37.4 million, reversing prior losses.

• Physical store sales grew 14–16% year-over-year, with strong market share gains in key regions.

• E-commerce sales totaled R$10.8 billion, with marketplace (3P) sales growing 4% and representing 40% of online sales.

• Service revenue grew 11% year-over-year.

Outlook and guidance

• Focus on maintaining or improving the 7.9% EBITDA margin, operational margin expansion, and resuming growth in the second half and next year.

• Expect positive impact from AliExpress/Alibaba partnership and digital DCC rollout, especially in Q4 and Black Friday.

• Continued investment in technology, logistics, and customer experience, including AI initiatives and fulfillment expansion.