May 7, 2019 / 12:25 PM / a month ago

Brazil's Magazine Luiza posts net profit in line with expectations

FILE PHOTO: The logo of retail Magazine Luiza S.A. is seen in their logistics center in Louveira, Brazil April 24, 2018. REUTERS/Paulo Whitaker

SAO PAULO (Reuters) - Brazilian electronics and appliance retailer Magazine Luiza SA reported a quarterly net profit in line with market expectations, helped by a 28 percent increase in total sales largely driven by e-commerce.

In a securities filing late on Monday, the company posted first-quarter net income of 132.1 million reais ($33.29 million), down 10.4 percent from a year ago.

Excluding the impact of adopting international accounting standards known as IFRS, the retailer’s net profit totaled 138.6 million reais ($34.93 million). Analysts on average expected 134.55 million reais ($33.91 million), according to Refinitiv data.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) grew by 31.6 percent year-on-year to 396.4 million reais.

Total sales, including brick-and-mortar stores, traditional e-commerce and third-party vendors rose 5.718 billion reais from 4.466 billion reais a year ago.

Magazine Luiza also posted same-store-sales growth of 8.1 percent, lower than the 15.9 percent rise reported in the first quarter of 2018. E-commerce increased 50.1 percent to 41.4 percent of total sales.

Net revenue grew 19.8 percent year-on-year to 4.329 billion reais. Total operational expenses grew by 6.5 percent to 816.1 million reais.

Magazine Luiza shares have become an investor darling in the last few years, more than doubling in value in 2018, as the company successfully transitioned from a family-owned brick-and-mortar store chain into a tech-savvy retailer.

Its strong performance is also seen as a challenge to local rivals Via Varejo SA and B2W, as well as to international retailers currently expanding operations in Brazil, including Amazon.com Inc and Mercadolibre Inc.

Reporting by Gabriela Mello; Editing by Steve Orlofsky

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