Magazine Luiza Posts US$14M Q2 Loss as Online Sales Fall 12%
Brazil · Business
Key Facts
—Loss widened. Magazine Luiza reported a statutory net loss of R$72.5 million (US$14.2 million), versus R$24.4 million (US$4.8 million) a year earlier.
—Adjusted earnings also stayed negative. The adjusted loss was R$50.4 million (US$9.9 million), reversing a small R$1.8 million (US$0.4 million) profit.
—Channels diverged. Physical-store sales grew 10.3%, while total e-commerce sales fell 11.9%.
—Margins held. Adjusted EBITDA reached R$708.8 million (US$138.9 million), down 2.5%, with the margin unchanged at 8.0%.
—Cash remained substantial. Total cash was R$5.8 billion (US$1.14 billion), with adjusted net cash of R$806 million (US$158.0 million).
Magazine Luiza’s quarter tells two different retail stories: physical stores regained momentum, but shrinking online sales and heavy financing costs kept the broader group in the red.
The operating result was more resilient than the loss suggests. Gross margin edged higher and the adjusted EBITDA margin held at 8.0%. The problem sits below that line: R$572.3 million (US$112.2 million) of negative financial results exceeded adjusted operating income before financing, leaving the retailer unable to convert stable margins into net profit.
A Wider Loss Despite Stable Operating Margin
The statutory net loss widened to R$72.5 million (US$14.2 million) from R$24.4 million (US$4.8 million). Excluding provisions, restructuring expenses and other nonrecurring items, the adjusted loss was R$50.4 million (US$9.9 million), compared with a R$1.8 million (US$0.4 million) profit in Q2 2025.
Adjusted EBITDA fell 2.5% to R$708.8 million (US$138.9 million), but its margin was unchanged at 8.0%. Gross margin improved by 0.1 percentage point to 30.6%, while selling expenses declined to 18.5% of net revenue from 18.7%. Those figures show expense discipline, but net revenue fell 2.6% to R$8.90 billion (US$1.74 billion).
| Metric | Q2 2026 | Year on year |
|---|---|---|
| Total ecosystem sales | R$14.51bn / US$2.84bn | −5.1% |
| Net revenue | R$8.90bn / US$1.74bn | −2.6% |
| Adjusted EBITDA | R$708.8m / US$138.9m | −2.5% |
| Statutory net loss | R$72.5m / US$14.2m | Loss widened |
| Physical-store sales | R$5.2bn / US$1.02bn | +10.3% |
| E-commerce sales | R$9.3bn / US$1.82bn | −11.9% |
Stores Grew While E-Commerce Retreated
Physical-store sales rose 10.3%, with same-store growth of 9.7%. Management said televisions linked to the football World Cup helped the channel, and June store sales alone grew 18%. Magalu ended the quarter with 1,246 stores.
Online performance moved in the opposite direction. First-party e-commerce fell 11.5%, marketplace sales declined 12.6%, and total online sales dropped 11.9%. E-commerce consequently represented 64.3% of total sales, down five percentage points. Magalu says it protected margins rather than chase unprofitable volume amid higher memory-chip costs and intense platform competition.
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Amazon, Credit and AI Are the Recovery Bets
Magalu began selling its own inventory through Amazon Brazil in mid-June and expects a more meaningful sales contribution in the third and fourth quarters. The arrangement gives its first-party assortment another route to customers without requiring the company to subsidize its own marketplace traffic.
Financial services supplied an important cushion. Luizacred earned R$135.3 million (US$26.5 million), with annualized return on equity of 23.5%, while MagaluPay’s financial institution posted R$17 million (US$3.3 million) of net income. The company also said its WhatsApp shopping assistant had surpassed R$100 million (US$19.6 million) in cumulative sales by July.
What to Watch Next
Online stabilization. The main test is whether Amazon distribution and better product availability can halt the double-digit e-commerce decline.
Financial costs. Operating discipline will not restore profit unless the R$572 million (US$112.1 million) quarterly financing burden falls or operating earnings rise.
Store momentum. Investors will watch whether 9.7% same-store growth persists after the World Cup boost.
Cash generation. Magalu generated R$258.8 million (US$50.7 million) in operating cash during Q2 and must preserve that discipline while restarting growth.
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Frequently Asked Questions
What was Magazine Luiza’s Q2 2026 net result?
Magazine Luiza reported a statutory net loss of R$72.5 million (US$14.2 million) and an adjusted loss of R$50.4 million (US$9.9 million).
How did Magazine Luiza’s physical stores perform?
Physical-store sales grew 10.3%, while same-store sales increased 9.7%.
How much did Magalu’s e-commerce sales fall?
Total e-commerce sales declined 11.9%; first-party online sales fell 11.5% and marketplace sales dropped 12.6%.
What was Magazine Luiza’s adjusted EBITDA?
Adjusted EBITDA was R$708.8 million (US$138.9 million), down 2.5%, with the margin unchanged at 8.0%.
What could help Magazine Luiza return to profit?
The key factors are stabilizing e-commerce, maintaining store growth and margins, expanding profitable financial services, and reducing the burden of financial costs.
Sources
- Magazine Luiza: official Q2 2026 earnings release
- Magazine Luiza investor relations
- Central Bank of Brazil PTAX selling rate, August 6, 2026: R$5.1017 per US dollar.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error
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