Magazine Luiza reports a 11.4% drop in net profit for the fourth quarter of 2019, compared to the same period last year. The news was released on Monday (17). The jump in operating expenses “overshadowed” even higher sales, bringing margins down.
The company announced net profit of R$168 million between October and December, compared to R$189.6 million in the 4th quarter of 2018.
In adjusted terms, the actual result was R$185.3 million, a decrease of R$0.51 million year-over-year. However, in 2019, the company's net income totaled R$185.3 million, an increase of R$0.51 million compared to the previous year (R$185.3 million).
Reuters highlighted that Magazine Luiza, which successfully transitioned from a brick-and-mortar store chain to a high-tech retailer in recent years, recorded total sales of 8.988 billion reais in the fourth quarter, a positive difference of 51.3% over the previous year, marking the best performance in history.
Net revenue jumped to R$6.385 billion in 2020, representing a year-over-year increase of R$38.51 billion. Meanwhile, operating expenses rose to R$1.449 billion in 2020, representing a year-over-year increase of R$50.61 billion in 2020.
For 2020
The company said it plans to focus its efforts on integrating the acquired companies, which includes online sports retailer Netshoes Ltd, purchased in June 2019.
At the same time, Magazine Luiza announced on Monday the completion of the purchase of the book marketplace Estante Virtual, for an undisclosed amount, a move that was seen by market experts as an attempt to challenge the American giant Amazon.com.
Earnings before interest, taxes, depreciation, and amortization (EBITDA), an indicator of the company's operating performance, increased 41.21% year-over-year to R$499.1 million. Analysts, on average, had forecast EBITDA of R$466 million for the period, according to Refinitiv data.