Brazilian retailer Magazine Luiza SA reported net sales of 9.4 billion reais ($1.87 billion) in the fourth quarter, down 6.6% year-on-year.
For the full year, it recorded net revenue growth of 20.9% to R$35.2 billion, while adjusted net profit for the year was R$144.2 million, nearly 70% less than in 2020.
The slowdown towards the end of the year was attributed to the worsening inflationary scenario, rising interest rates and the slow recovery in physical store sales, which fell 18% in the fourth quarter and n increased by only 0.2% for the year as a whole.
Colloquially known as Magalu, the retailer’s pivot to the web has paid off, with its e-commerce channel accounting for 71.5% of total sales in 2021 and third-party sales seeing growth of nearly 69% for l ‘year.
Earnings before interest, taxes, depreciation and amortization (EBITDA) of 243.5 million reais in the fourth quarter fell 53.5% year-on-year.
Luiza magazine was founded in 1957 and currently operates 1,485 physical stores in 21 of Brazil’s 26 states. In recent years, it has also become a leading e-commerce platform, rivaling B2W giants Via Varejo and Latin American giant Mercado Libre.
Inside Brazil’s radical retail giant
With annual sales of $7 billion, an aggressive digital strategy and a slew of recent acquisitions, Luiza magazine is determined to conquer fashion.