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Brazil's Magazine Luiza eyes wide range of potential acquisitions

08/18/2020 | 04:23pm EDT

SAO PAULO, Aug 18 (Reuters) - Brazilian retailer Magazine Luiza SA is open to "all kinds" of acquisitions including supermarkets, its chief executive said on Tuesday, pointing to a sector that has seen robust growth during quarantine measures.

But Frederico Trajano cautioned that the company's interests went beyond "product categories," citing the acquisition strategy of larger rival Amazon.com whose targets have ranged from robotics to supermarkets.

"The spectrum (of acquisition targets) is very wide when you have a vision as comprehensive as ours. It's not just any piece that fits the puzzle, but we can buy all kinds of companies," Trajano said on an analyst call. "Don't be surprised."

Magazine Luiza on Monday reported second quarter sales surged 49% to 8.6 billion reais ($1.6 billion), helped by its strong e-commerce footprint more than its brick and mortar stores.

Magazine Luiza's shares shot up nearly 10% on Tuesday, on for their biggest rise in over three months and the biggest gainer on the Bovespa index.

Analysts at BB Investimentos noted that in July alone sales in physical stores rose 10% and online sales soared 162%, "signaling that consumer behavior changes observed in the second quarter will be permanent and should favor companies well positioned for online growth, like Magazine Luiza."

At the onset of the COVID-19 pandemic, physical store sales accounted for about 55% of total sales, BB Investimentos noted. (Reporting by Alberto Alerigi Jr Writing by Jamie McGeever Editing by Marguerita Choy)

© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
AMAZON.COM, INC. 0.95% 3415.25 Delayed Quote.3.87%
IBOVESPA -0.64% 129259.49 Delayed Quote.9.30%
MAGAZINE LUIZA S.A. -2.78% 20.31 End-of-day quote.-18.60%
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Sales 2021 36 708 M 7 250 M 7 250 M
Net income 2021 690 M 136 M 136 M
Net cash 2021 174 M 34,4 M 34,4 M
P/E ratio 2021 190x
Yield 2021 0,12%
Capitalization 131 B 26 196 M 25 864 M
EV / Sales 2021 3,56x
EV / Sales 2022 2,89x
Nbr of Employees 40 000
Free-Float 40,8%
Duration : Period :
Magazine Luiza S.A. Technical Analysis Chart | MGLU3 | BRMGLUACNOR2 | MarketScreener
Technical analysis trends MAGAZINE LUIZA S.A.
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 14
Average target price 27,36 BRL
Last Close Price 20,31 BRL
Spread / Highest target 57,6%
Spread / Average Target 34,7%
Spread / Lowest Target 22,9%
EPS Revisions
Managers and Directors
Frederico Trajano Inácio Rodrigues Chief Executive Officer
Roberto Bellissimo Rodrigues Chief Financial Officer & IR Officer
Luiza Helena Trajano Inácio Rodrigues Chairman
André Fatala Chief Technology Officer
Fabrício Bittar Garcia Vice President-Operations & Commercial
Sector and Competitors