' We have no more excuses, ' says Luiza

The "dry" is over. In the words of Luiza Helena Trajano, Director President of Magazine Luiza, the phase of weak results came in 2012 and from now on the company has no "apologies" for any stumbling. The order of integration of the recent acquisitions-Baú da Felicidade Maia and Stores, the cost cutting of recent months and the financial adjustments Luizacred form a basis for another level of results, according to the network. "We always have ' dry ' when buying something," said Luiza yesterday. "But we have no more excuses," she said to analysts. The company's shares closed yesterday at high of 5.36%, after a week in the fall.
The "message is optimistic," as Deutsche Bank analysis on the numbers in the first quarter. There is "some progress", but the problem is that the growth "more relevant" has yet to be seen, says Renata Coutinho, Deutsche analyst. Experts believe that the company is in a transition phase, with improvement in gross margins and Ebitda (earnings before taxes, depreciation and amortization) in the beginning of the year-synergy gains with signaling integration of acquisitions. But sales rose tentatively and net profit came below the forecast of analysts.
"Despite some positive points to a recovery in the medium term, as the performance of Luizacred and gross margin improvement, the figures came below expectations and will negatively impact the performance of the paper in the short term," wrote Ricardo Correa report, Director of Active broker.
The company posted consolidated net profit of R $ 800 thousand in the first quarter of 2013, below the forecast of $ 8.7 million from Deutsche, but above the loss of r $ 1.5 million provided by ITA BBA. Anyway, it's an improvement compared to the loss of r $ 40.7 million in the same range of 2012 (were four quarters with losses in 2012).
Gross sales rose 7% from January to March and net, 6%-below the estimate of most analysts. There was more control of operating expenses, which advanced 2.6%, totaling r $ 445,5 million. As a result, Ebitda rose by 175%.
The sales performance of the stores with more than one year in operation grew slim 5.2% versus 15.9% high in the same range of 2012. The high base of comparison explains part of the fall, but the number reflects the new policy of network operation. The Magazine Luiza wants to sell with profitability-as already made clear earlier this year-and this means does not enter into price war and, soon, open hand, which affects revenue. At the same time, the network also reduced the number of Luiza cards on the market. In 12 months, decreased by 500 thousand units. "Now, get the cards that give profit," said the entrepreneur. Luizacred went from a loss of r $ 16.7 million to a profit of $ 15.6 million.
The expectation of the market is in balance, the next improvements that may reflect new synergies in the acquired networks and increased operating margins in the Northeast, which has already made gains in profitability in 2013. Measures such as the development of a more accurate pricing for each region of the country, to be implemented this year, can also bring market share gains. The company also says it must act to give more autonomy to the managements of shops along this year, so that the stores to act more quickly against competition.
The common shares of the company, which began the year at r $ 12,14, closed yesterday at $ 8. In the year, the paper fell 36%. Since its debut on the stock exchange in April 2011, the company has lost half of its market value – today for $ 1.49 billion. Their results discouraged investors, but the sector also has not, historically, good performances. Tight margins and strong competition form a scenario unattractive to investors, say analysts.