(Adds details on Q3 earnings, analyst’s comments and share performance)
By Gabriela Mello
SAO PAULO, Oct 30 (Reuters) - Brazilian retailer Magazine Luiza SA expects an even more positive fourth quarter as the country’s economic recovery is likely to gain momentum with the approval of key reforms, its chief executive officer said on Wednesday.
“I am optimistic after the pension reform approval ... the fourth-quarter promises positive results and the economic recovery is likely to be stronger as of next year,” CEO Frederico Trajano told analysts and investors in a call to discuss quarterly results.
Magazine Luiza shares were trading more than 7% up on Wednesday afternoon at 44.09 reais, posting the best performance among stocks listed in Brazil’s main index, which was down 0.4%.
On Tuesday night, Magazine Luiza posted a 12.7% rise in third-quarter adjusted net income to 136.3 million reais ($33.91 million), as sales grew stronger, led mostly by e-commerce.
“Magazine Luiza posted solid operating numbers, despite a tough comparison with third-quarter of 2018,” analysts at BTG Pactual wrote in a report on Wednesday, citing an exponential growth in online sales as the main highlight.
In a note to clients, Credit Suisse analysts also pointed out a sharp top-line growth, adding that the retailer is likely to maintain this pace in upcoming quarters.
According to Trajano, the company is focused on expanding its marketplace platform to boost sales and operating profit. The retailer has been adding around 1,000 new sellers to the platform every month, he added.
By the end of September, its marketplace had a total of 11,400 partners, which together offer approximately 12 million products to customers.
“We see opportunities to later monetize this platform by providing sellers with value-added services,” Trajano said, citing faster deliveries and financial solutions such as receivables anticipation that could be offered in exchange for some sort of fee.
Magazine Luiza started a delivery pilot with 200 third-party sellers and plans to roll out the service to all of them at some point in the future. ($1 = 4.0194 reais) (Reporting by Gabriela Mello; editing by Jonathan Oatis)