Magazine Luiza has a drop of 11.4% in net income for the fourth quarter of 2019, compared to the same period in the previous year. The news was released on Monday (17). As the jump in operating expenses “overshadowed” even higher sales, bringing margins down.
The company announced net income of R$ 168 million between October and December, compared to R$ 189.6 million in Q4 2018.
In adjusted terms, the actual result was R$ 185.3m, which means a year-on-year decrease of 0.5%. However, in the accumulated in 2019, the company's net profit amounted to R$ 921.8 million. Increase of 54.3% compared to the previous year (R$ 597.4 million).
Reuters noted that Magazine Luiza, which has successfully transitioned from a brick-and-mortar 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 income jumped to R$ 6.385 billion, which is equivalent to a growth of 38.5% yoy. Meanwhile, operating expenses grew to R$ 1.449 billion. That is, an increase of 50.6% in the same comparison.
for 2020
The company said it plans to focus its efforts on integrating the acquired companies, which includes online sports retailer Netshoes Ltd, which it acquired in June 2019.
At the same time, Magazine Luiza released this Monday the completion of the purchase of the book marketplace Estante Virtual, for an unannounced amount, a move that was seen by market specialists as an attempt to challenge the US giant Amazon.com.
Earnings before interest, taxes, depreciation and amortization. An indicator of the company's operating performance, also known as Ebitda, increased by 41.2% year-on-year to R$ 499.1 million. Analysts, on average, predicted Ebitda of 466 million reais in the period. According to data from Refinitiv.
