(Recasts with focus on third quarter in Spain, Brazil)
MADRID, Oct 27 (Reuters) - Spanish discount supermarkets chain DIA showed some signs of a turnaround in its home market and Portugal in the third quarter, as a decline in like-for-like sales slowed and the group attempts to win more customers with redesigned stores.
DIA bucked a severe economic downturn in Spain with its cut-price offering but its business model has come under pressure as it expands and a strengthening economy makes competition more intense.
It is also exposed to Brazil, which has slumped into its worst recession in nearly three decades, though the company said it would press ahead with its expansion there despite the falling Brazilian real weighing on gross sales in the third quarter.
Meanwhile DIA said like-for-like sales in Spain and Portugal, which account for nearly two thirds of revenue, fell by 2.3 percent in the July-September period from a year earlier.
That was a more moderate drop than the 5.2 percent fall registered a quarter earlier in comparable sales, which strip out the effect of acquisitions and new store openings.
DIA has snapped up stores from Spanish rivals El Arbol and Eroski this year, while at the same time shedding a business in France.
The company also said on Tuesday it would be setting up shop on Alibaba's Chinese Tmall online marketplace as of November. It already has a small presence in Shanghai.
DIA's adjusted earnings before interest, taxes, depreciation and amortization rose 4.4 percent to 161 million euros ($179 million) in the third quarter. Profit was almost four times higher at 41 million euros.
Net profit the first nine-months of the year was down 53 percent at 104 million euros, partly as a result of its French disposal. ($1 = 0.9042 euros) (Reporting by Sarah White; Editing by Greg Mahlich)