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Brazil's Magazine Luiza swings to loss, hit by higher borrowing costs

Published 11/10/2022, 06:40 PM
Updated 11/10/2022, 06:46 PM
© Reuters.

SAO PAULO (Reuters) - Brazilian retailer Magazine Luiza SA reported on Thursday an adjusted net loss of 146 million reais ($27.4 million), the company's fourth straight quarterly loss as its bottom line suffered from higher interest rates.

The company posted an adjusted net profit of 22.6 million reais during the year-ago period.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 50.3% year-on-year to 527.5 million reais.

Magazine Luiza posted 2% sales growth to 14.15 billion reais. E-commerce sales rose 3% in the July-to-September period to 10 billion reais.

The retailer sells consumer goods in physical stores and online, including home appliances, electronics, furniture, cosmetics, toys and sporting goods; and offers insurance and other financial services.

In its quarterly earnings report, it said it overcame lingering pandemic effects and other macroeconomic challenges, especially Brazil's 13.75% benchmark interest rate, the result of aggressive monetary tightening aimed at curbing inflation.

"In this turbulent period, the company's market share in the online (sector) grew by 3.2 percentage points," the company said in a statement.

To help mitigate the impact of high interest rates, the retailer cut the number of installments for payments and expanded the use of a payment system that reduces associated financial costs, among other measures, said Vanessa Rossini, the company's investor manager.

($1 = 5.3356 reais)

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