Magazine Luiza Posts Q2 2026 Adjusted Net Loss of US$9.9 Million

Brazil · Business

Brazilian retailer reverses a year-earlier profit as online sales dip, while physical stores shine.

Magazine Luiza adjusted net loss reached R$50.4 million (US$9.9 million) in the second quarter of 2026. Reversing a year-earlier profit, the Brazilian retailer announced on August 7, 2026.

Q2 2026 Financial Results

The company reported a statutory net loss of R$72.5 million (US$14.2 million) for the quarter ended June 30. 2026, according to its investor-relations release.

This compares with a statutory loss of R$24.4 million in Q2 2025, as cited by Valor and CNN Brasil. Adjusted net loss of R$50.4 million contrasts with an adjusted profit of R$1.8 million in the same period last year.

The company said. Adjusted EBITDA came to R$708.8 million (US$138.9 million), with an 8.0% margin, according to company figures reported by Exame and Safra.

Adjusted EBITDA is a measure of profit before interest, taxes, and other deductions. The adjusted loss excludes certain one-time costs, like restructuring and asset impairments.

The company did not specify these amounts in the release. The statutory loss includes financial expenses related to the company’s debt, which have been pressured by Brazil’s high interest rate environment.

Magazine Luiza, commonly known as Magalu, is one of Brazil’s largest multichannel retailers, with a history dating back to 1957. The company has expanded aggressively into e-commerce and marketplace operations over the past decade.

Yet it still relies heavily on its physical store network for sales.

Revenue and Sales Trends

Net revenue fell to R$8.89873 billion in Q2 2026 from R$9.13467 billion a year earlier, according to Marketscreener. For the first half of 2026, sales totaled R$18.10446 billion, the company reported.

First-half net loss widened to R$127.68 million from R$11.59 million in H1 2025. The revenue decline was mainly due to weaker online sales, partially offset by robust physical store performance.

Gross margin expanded slightly to 30.6% in Q2 2026, up 0.1 percentage point year over year, according to company figures. Gross margin is the percentage of revenue left after paying the direct costs of goods sold.

E-commerce Decline Versus Physical Stores

Physical store sales rose 10.3% year over year, while e-commerce fell 11.9% in Q2 2026, according to a TradingView summary. Another independent report said online GMV dropped 12% and consolidated GMV fell 5% during the quarter.

GMV means gross merchandise value, the total value of goods sold. These channel figures come from secondary reporting; the company’s IR presentation provides the official breakdown.

The shift reflects consumers returning to in-store shopping after the pandemic. Magazine Luiza has also been reducing promotional spending online to protect margins.

This contributed to the e-commerce decline. The company has been investing heavily in its logistics network, including new fulfillment centers.

These investments increase operational costs but are intended to improve delivery times and customer satisfaction. It remains less profitable than first-party sales, according to an Investing.

com transcript.

Magazine Luiza adjusted net loss: Management Commentary

Chief Financial Officer (CFO) said in a statement: ‘We are doing everything to return to profit without depending on interest rates,’ as quoted by Money Times. The company emphasized a focus on profitability over growth, according to Exame.

Executives described the quarter as a ‘growth reset’ aimed at improving margins, per an Investing. com report.

Management acknowledged the challenging macroeconomic environment, including high interest rates and inflationary pressures on consumer spending. During the earnings call, the CFO noted that the company is ‘optimizing’ its e-commerce operations to reduce losses.

The company is also leveraging the physical store network’s strengths. Chief Executive Officer (CEO) emphasized that the company is ‘not chasing market share at any cost.

Instead, it is prioritizing profitable sales, as reported by Valor. The management team also highlighted that they are renegotiating contracts with suppliers and reducing overhead costs.

Market Reaction and Context

Shares fell 6.1% following the earnings release, according to an earnings call transcript on Investing. com.

The adjusted loss and e-commerce weakness come amid high Brazilian interest rates, which affect consumer credit and demand. The Selic rate, Brazil’s benchmark interest rate, has been kept high to fight inflation.

This increases the cost of credit for consumers and companies, according to the Central Bank of Brazil. Magazine Luiza operates stores in Brazil, selling electronics, furniture, and appliances.

The retailer has been expanding its marketplace and logistics network, but these investments have weighed on short-term profitability. In the same quarter, major Brazilian retailers, including Via and Americanas, also reported declining profits.

Competition from global players like Amazon and Mercado Livre continues to pressure market share in Brazil’s e-commerce sector. The company’s stock has been volatile over the past year.

Reflecting broader market concerns about the retail sector’s exposure to high interest rates.

Outlook and Analyst Notes

Company guidance for 2026 focuses on improving return on capital, rather than aggressive sales growth. Return on capital means how efficiently a company uses its money to generate profits.

Analysts have noted the gross margin expanded slightly to 30.6%, a positive sign despite the loss, based on Safra’s analysis. The company plans to continue investing in logistics and marketplace expansion, according to the earnings call.

Analysts at Safra and Exame highlighted the company’s disciplined approach to controlling expenses, which helped offset revenue declines. The company reiterated its projection of positive free cash flow for the full year 2026.

Free cash flow is the cash a company generates after paying for things like buildings and equipment. Management expects e-commerce sales to stabilize in the coming quarters as the company completes its operational adjustments.

The company also plans to focus on increasing the share of higher-margin products, such as furniture and appliances, in its sales mix.

Frequently Asked Questions

What was Magazine Luiza’s adjusted net loss in Q2 2026?

Adjusted net loss was R$50.4 million (US$9.9 million), reversing an adjusted profit of R$1.8 million in Q2 2025, according to company results.

How much was the statutory net loss for Magalu in Q2 2026?

The statutory net loss was R$72.5 million (US$14.2 million). Wider than R$24.4 million in the same period last year, as reported by Valor and CNN Brasil.

Did e-commerce sales decline for Magazine Luiza in Q2 2026?

Yes, e-commerce fell 11.9% year over year, while physical store sales rose 10.3%, according to a TradingView summary of the results. Another report said online GMV fell 12%.

What was Magalu’s adjusted EBITDA in Q2 2026?

Adjusted EBITDA was R$708.8 million (US$138.9 million), with a margin of 8.0%, according to company figures cited by Exame and Safra.

Sources: Magazine Luiza Investor Relations; Valor; CNN Brasil; Money Times; Exame; Marketscreener; Safra

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