May 7, 2018 / 11:08 PM / 5 months ago

UPDATE 1-Brazil's Magazine Luiza reports strong profit as e-commerce takes off

(Adds details on sales and expansion plans, context, market view)

By Gram Slattery

SAO PAULO, May 7 (Reuters) - Brazil’s Magazine Luiza SA , an electronics and appliance retailer whose share price has tripled in the last 12 months, again reported a strong rise in quarterly profit on Monday and pledged to accelerate its already aggressive growth.

In a securities filing, the company reported first-quarter net income of 147.5 million reais ($41.5 million), up 152 percent from a year earlier. Earnings before interest, taxes, depreciation and amortization came in at 300.5 million reais, up 30 percent from the same period last year.

Those estimates appeared to beat the market’s already lofty expectations. Analysts at BTG Pactual and Itaú BBA had both projected first quarter net profit of around 120 million reais.

The company’s e-commerce operation drove growth, expanding 65 percent in yearly terms. Sales through its mobile application picked up pace, while the company’s marketplace format, which allows third party vendors to sell online via Magazine Luiza platforms, also grew rapidly.

Magazine Luiza’s strong performance in recent quarters - as well as that of tech-savvy competitors like Via Varejo SA and B2W Cia Digital SA - illustrates how some Brazilian retailers are successfully capturing the country’s growing e-commerce market as the economy recovers from a years-long recession.

That could make life difficult for international companies like Amazon.com Inc and Mercadolibre Inc as they expand operations in Latin America’s largest economy.

In the second quarter, Magazine Luiza said it plans to open 30 new stores, mainly in regions where it has little or no presence, such as Sao Luis in the nation’s relatively impoverished north.

It has recently acquired a logistics start-up called Logbee, which it said would aid its distribution operations beyond metropolitan Sao Paulo.

Magazine Luiza also said that it had launched the biggest television sale in the company’s history during the first quarter, allowing customers to partially pay for new televisions by trading in their old sets. Ahead of the soccer World Cup in June and July, sales of televisions have picked up pace significantly in Brazil.

$1 = 3.55 reais Reporting by Gram Slattery Editing by Leslie Adler and Rosalba O'Brien

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