Magazine Luiza (MGLU3) Q2 2025 earnings summary

Executive summary

• Adjusted EBITDA grew 2.3% year-over-year to R$727 million (8.0% margin), driven by physical store growth, expense control, and Luizacred's strong results, despite high SELIC rates and inflation.

• Total sales reached R$15.3 billion, with 3.5% same-store sales growth and 5% online growth in high-ticket items, while consolidated net sales revenue for the six-month period was R$18.52 billion, up 1.5% year-over-year.

• Inventory reduced by R$150 million, with strategic management and clearance sales improving competitive positioning.

• Operating cash flow was R$597 million for the quarter and R$2.6 billion over the last twelve months; total cash position ended at R$8.0 billion.

• The period ended with a consolidated net loss of R$11.6 million, mainly due to higher finance costs.

Financial highlights

• Net revenue grew 1.4% year-over-year to R$9.1 billion in the quarter, with consolidated gross margin at 30.5% (down 0.4 p.p. year-over-year).

• Adjusted net income was R$1.8 million; including non-recurring items, net loss was R$24.4 million.

• Luizacred delivered net income of R$102 million, with annualized ROE of 19.5% and improved delinquency rates.

• MagaluAds revenue grew 66% year-over-year, and Magalog logistics expanded to 90 external clients.

• Net cash position of R$1.8 billion as of June 2025.

Outlook and guidance

• Focus remains on profitability, operational efficiency, and expanding the Magalu ecosystem, with continued investment in technology and logistics.

• Expecting improved sales and competitive conditions in Q3 due to better inventory costs and ongoing efficiency.

• Management continues to monitor macroeconomic and market risks, with a focus on liquidity, cost control, and operational efficiency.