Magazine Luiza (MGLU3) Q1 2026 earnings summary

Executive summary

• Total sales reached R$15.2 billion in 1Q26, with physical stores growing up to 7% year-over-year and expanding market share, while e-commerce sales declined 11% due to cost pressures and margin prioritization.

• EBITDA was R$718 million (7.8% margin), with gross margin at 30.8%, reflecting strong operational discipline and near historical highs.

• Ecosystem brands like KaBuM!, Netshoes, and Galeria Magalu delivered solid results and contributed to net income diversification.

• Multi-channel and omnichannel strategies advanced, with strong performance from acquired businesses and expansion of physical stores.

• Magalu Ads revenue grew 20%, Magalog logistics revenue with external customers increased 30%, and AI initiatives scaled with over 120 projects in production.

Financial highlights

• Adjusted EBITDA reached R$718 million (7.8% margin), and adjusted net result was a loss of R$34 million, impacted by higher financial expenses from increased CDI rates.

• Gross margin stood at 30.8%, up 0.2 p.p. year-over-year, with gross profit at R$2.8 billion.

• Total cash position was R$6.2 billion, with adjusted net cash of R$1.2 billion.

• Operational cash generation reached R$2.0 billion in the last twelve months.

• Working capital improved by R$0.6 billion year-over-year, mitigating higher financial expenses.

Outlook and guidance

• The company expects the second quarter to benefit from FIFA World Cup seasonality, with increased sales in TVs, soundbars, and sports merchandise.

• Strategic focus remains on profitability, operational efficiency, and scaling high-value ecosystem assets such as Magalu Ads, Magalu Cloud, and MagaluPay.

• Continued investment in ecosystem expansion, digital transformation, and omnichannel integration, including pilots for Galeria Magalu and AI-driven commerce.

• Online growth initiatives include agentic e-commerce (WhatsApp da Lu), app enhancements, and expanded B2B partnerships.

• Expectation to maintain and accelerate growth in physical stores and resume online growth in coming quarters.