Magazine Luiza (MGLU3) Q2 2025 earnings summary

Executive summary

• Adjusted EBITDA reached R$727 million in Q2 2025, up 2.3% year-over-year with an 8.0% margin, supported by physical store growth, expense control, and Luizacred's strong results.

• Total sales were R$15.3 billion, with physical stores up 3.5% (5% excluding flood-impacted regions) and e-commerce stabilizing.

• Inventory reduced by R$150 million, and operating cash flow reached R$597 million for the quarter.

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

• Ecosystem diversification, including KaBuM!, Netshoes, Época, and Magalog, contributed to profitability and resilience.

Financial highlights

• Net revenue grew 1.4% year-over-year to R$9.1 billion; gross margin was 30.5%, down 0.4 p.p.

• Adjusted EBITDA margin was 8.0%, up 0.1 p.p. from 2Q24.

• Operational cash flow was R$597 million in the quarter and R$2.6 billion over the last twelve months.

• Net cash position was R$1.8 billion, with total cash of R$8.0 billion as of June 2025.

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

Outlook and guidance

• Focus on expanding the ecosystem, increasing profitability, and maintaining operational efficiency.

• Investments in technology and logistics are expected to drive future growth and efficiency.

• Launch of Galeria Magalu and MagaluPay SCFI to enhance multichannel experience and financial services.

• Anticipates continued margin discipline and operational leverage, aiming for both margin and top-line growth over the next 12 months.

• Confident in capturing growth when SELIC rate declines, with focus on positive contribution margins.