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Magazine Luiza Reports Loss of R$ 24.4 Million in Q2 2025 and Exposes Challenges of Digital Retail. Adjusted Result Fell 95% and Marketplace Decreased 6.4%.
Magazine Luiza, one of the leading names in Brazilian retail, reported a net accounting loss of R$ 24.4 million in the second quarter of 2025, raising an alert about the recovery of the retail sector in the country. This result reverses the profit of R$ 23.6 million obtained in the same period of 2024 and exposes the challenges faced by Magalu amidst a scenario of retracted consumption, pressure on digital channels, and a continuous need for investments in technology.
With adjustments that disregard non-recurring effects, the adjusted net profit was only R$ 1.8 million, representing a decrease of 95.3% compared to the adjusted result of R$ 37.4 million recorded in the second quarter of last year.
Loss of Magazine Luiza in Q2 Raises Concerns About the Retail Sector
The numbers reflect not only the internal challenges of the company but also a delicate moment for digital retail in 2025, pressured by changes in consumer behavior, retraction in demand, and greater selectivity in purchases, especially in categories with higher price tickets.
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The net revenue of Magazine Luiza in the quarter was R$ 9.13 billion, with a modest increase of 1.4% compared to the same period in 2024. Meanwhile, the adjusted EBITDA reached R$ 726.7 million, a growth of 2.3%, with an 8% margin, an increase of just 0.1 percentage point — a result attributed by the company to the good performance of physical stores, cost control, and the performance of Luizacred.
Magalu Financial Results Show Stagnation in Sales and Drop in Marketplace
Total sales amounted to R$ 15.3 billion, representing a slight decrease of 0.6% compared to the second quarter of 2024. Within this volume, e-commerce contributed R$ 10.6 billion, while physical stores accounted for R$ 4.7 billion.
Despite a 2.1% retraction in total e-commerce sales, there was a 0.8% increase in sales with owned stock (1P), driven by higher-value-added categories such as appliances and electronics. On the other hand, the marketplace (3P) experienced a more significant decline of 6.4%, reflecting increased competition and selective consumption.
Nevertheless, the fulfillment service — logistics carried out by the company itself — advanced, accounting for 27% of marketplace orders, which indicates an attempt by the company to increase control over the consumer experience and improve logistical margins.
MagaluAds and Magalu Cloud Stand Out in the Quarter Despite Overall Loss
Even with the negative financial result, some areas of the group showed significant growth. MagaluAds, the company’s advertising platform, experienced a 66% increase in revenue, boosted by new ad formats and improved performance metrics.
Magalu Cloud, the group’s cloud computing service, surpassed one thousand external clients and started catering to 40% of the company’s internal demand, establishing itself as a pillar of innovation and reducing dependence on external suppliers.
Luizacred Helps Offset Loss, with Profit of R$ 102 Million
Another positive point in the balance sheet was the performance of Luizacred, Magalu’s financial arm. The institution reported a net profit of R$ 102 million in the quarter, with an annualized ROE (return on equity) of 19.5%.
The credit portfolio reached R$ 20 billion, with a decrease in delinquency rates, reflecting a healthier and less risky portfolio.
This performance demonstrates how the group’s financial vertical has supported part of the operational results, even with declines in sales and profitability in other areas.
Investments Remain Focused on Technology and Integration of Channels
Despite the loss, Magazine Luiza maintained its investment policy, allocating R$ 206 million in the quarter, of which 74% was applied in technology, focusing on digitalization, data, and improving the consumer experience.
Another strategic highlight was the inauguration of the Magalu Gallery in São Paulo, a physical space aimed at integrating online and store channels, symbolizing the omnichannel vision that the company has sought to strengthen in recent years.
Despite the negative net result, Magazine Luiza reported operational cash generation of R$ 597 million in the period and ended the quarter with R$ 8 billion in cash, demonstrating the ability to preserve liquidity even in a challenging scenario.
This performance was driven by efficient inventory management and improved working capital, which helped cushion the impact of declines in operational margins.
Recovery of Digital Retail Requires Strategy Beyond Cuts
The loss of Magazine Luiza in the second quarter of 2025 is yet another warning sign regarding the challenges that persist in Brazilian digital retail, even for established companies like Magalu.
With a decline in the marketplace, slight growth in physical stores, and a less favorable macroeconomic scenario, the company will have to increasingly invest in operational efficiency, innovation, and multichannel integration to return to sustainable growth.
The positive highlights, such as the growth of MagaluAds, the advancement of corporate cloud, and the resilience of Luizacred, show that there are paths for recovery, but the pressure on results is likely to persist in the coming quarters.
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