Magazine Luiza improves result

After the command of Magazine Luiza, three months ago, that would not exist more excuses for the "dry" of results that the company lived in recent times, the retailer announced yesterday figures assessed positively by the market. The shares have risen throughout the day and closed at high of 28.89%, to $ 6.38 on a day of Ibovespa stable.
Improvements in some operational indicators in the second quarter, advances in financial performance Luizacred and a promise of "gradual and steady" development of the results help explain the good market assessment. July was the best month for the company this year, said Marcelo Silva, Chief Executive Officer of the network. The numbers of the month should be disclosed in November.
According to the report for the second quarter, the adjusted net income (excluding the effect from the sale of a distribution center in June) grew 21.4%, to R $ 11.5 million, as compared to the same period in 2012. The relationship between expenditure and revenue, in 25.2% from January to March, fell to 21% from April and June (in the second quarter of 2012, was at 24.3%). The Ebitda margin (earnings before interest, taxes, depreciation and amortization) had slight 0.1 point high (5% to 5.1%. In the first quarter, the index was 3.6%.
The company has anticipated that actions must be taken in the second half, in an attempt to increase network profitability levels-adjusted net margin was stable from April to June, in 0.6%-as a result of a greater dilution of costs and expenses, which evolved less than planned in the second half. This occurred because the company decided to expand spending on marketing, with stronger exposure and brand promotions in a more difficult consumer environment, increasing marketing expenditures.
Among the actions that dilute more costs is the process of re-evaluation of freight expenses, already in progress, in order to improve the economy and improve delivery time to the customer. Also advances the new pricing policy of the company-with more regional analysis. The Zero-based Budget (tool used in waste reduction), began to be implemented this year and should bring more visible results in the last quarter, says the Director.
Since you have purchased, within just one year, the Mayan and the Shops of Baú da Felicidade, the company went on to deliver weaker numbers, with higher pressure on costs and profit at the expense reversal during the integration of the business in recent quarters. There is a market expectation as to the beginning of the recovery process more consistent results. And, despite some better numbers, there is a still cautious analysis of some experts, like Marcelo Bent, of Active broker.
"The company showed sales growth and higher than expected by the market, since there was a wide perspective of a weak second quarter, due to the large dependence of the company, its low margins and negative impacts of the June protests," he wrote in a report. Improvement of the profitability of Luizacred (Ebitda margin of 3.1% to 10.2% in the second quarter of 2012 and 2013) and there was expansion in the gross margins of the operations in the Northeast, highlights it. However, Bent prefers "challenge the market euphoria".
"In fact the investment in the company's marketing campaigns and other factors ' micro ' eclipsed the unfavorable situation, however we do not believe that the improvements are sustainable in the long term without a change of the adverse scenario, since the banks are still low and expenditure SG&A [selling, General and administrative provisions] should not normalize without significant follow-up on sales volume", wrote bent. Net revenues increased 11.6% from April to June, reaching R $ 1.84 billion, in the same period in 2012, the high was 22.3%. The high base can justify the slowdown, but analysts believe that the market slowdown may have heavy. The high of 11.6% is within the network performance forecasts.
The company, in a more cautious analysis, rule out the hypothesis of quarters "spectacular," said Silva. He said that the retailer will deliver better results in 2013 (in 2012, the profit fell 75%) and in 2014, the gains of initiatives now appear complete.