At Magalu, the ecosystem is ready. Now it's time to extract value.

Five years ago, Magazine Luiza embarked on a transformation journey, ceasing to be just a name focused on white goods and transforming itself into an ecosystem, adding new brands and services, with an eye on revenue diversification.

At the end of this period, marked by the arrival of names likeNetshoes and KaBuM! and also by expansion into other areas, such as cloud computing, the assessment is that Magalu emerges much more robust, prepared for variations in economic cycles.

With the structure in place, the company is preparing for a new five-year cycle, in which the goal is to unlock value from what has been built by incorporating artificial intelligence (AI) into retail.

“All the efforts we’ve put into building an ecosystem over the last five years are paying off,” Vanessa Rossini, Magalu’s director of investor relations, told NeoFeed . “We are a much more resilient company in the face of macroeconomic fluctuations and we are ready to begin a new cycle.”

According to her, the resilience of this business model is proven by the fourth-quarter and 2025 results, released on the evening of Thursday, March 12. During this period, Magalu recorded EBITDA of R$ 947.8 million, an increase of 12.5%, with the margin expanding by 0.7 percentage points to 8.5%. For the year, the indicator registered an increase of 10.6%, to R$ 3.2 billion, with the margin increasing by 0.7 percentage points to 8.3%.

Net revenue was R$ 11.2 billion, an increase of 3.4%, closing the year at R$ 38.7 billion, a growth of 2%. In the last three months of last year, total sales amounted to R$ 18.2 billion, a decrease of 1.1%. At that time, physical stores experienced growth of 8.7%, but e-commerce saw a decrease of 5.3% in total e-commerce sales.

According to Rossini, while physical retail presents a healthier competitive environment, e-commerce is more "irrational" and experiencing growth in low-ticket categories. "It's a game we decided not to play, because we decided to prioritize categories with higher contribution margins," she states.

In the bottom line of the balance sheet, Magalu recorded a 55.4% drop in net profit in the fourth quarter, totaling R$ 131.6 million. For the year, the decline was 54.4%, with profit totaling R$ 204.6 million.

Rossini states that, in addition to the impact of high interest rates on financial expenses, Magalu made an additional provision for inventory to accelerate the sale of excess, seasonal, or slow-moving products.

There was also the injection of R$ 453 million into Luizacred - a financial institution resulting from a joint venture with Itaú Unibanco - due to the lower expectation of receiving payments from overdue accounts (over 360 days) and the reversal of provisions for the Difal (difference in interstate ICMS tax rate) as per a decision by the Supreme Federal Court (STF) last year.

Some of these items also weighed on the company's margins, with the gross margin falling 2.4 percentage points to 27.3%. When excluding the effects of these non-recurring items, the gross margin would have remained stable at 30%, and profit would have fallen by 10.5% to R$124.7 million.

According to Rossini, even though the company is not entirely immune to the effects of double-digit interest rates and intense competition in the e-commerce world, Magalu ended last year satisfied.

"If we went back to the model from six or seven years ago, and were actually a durable goods retailer, we would hardly be making a profit in a year like this," says Magalu's director of investor relations.

She points out that Magalu now has a total cash balance of R$ 8 billion, with operational cash generation in the fourth quarter reaching R$ 2.2 billion, up from R$ 1 billion in total cash in 2015, and net cash of R$ 3.1 billion.

Unlocking value and AI

With its ecosystem format consolidated, Magalu is presenting its strategic plan for the coming years. One of the points the company intends to detail is the initiatives it plans to boost the created ecosystem, accelerating cross-selling between brands and encouraging customers to buy on more than one platform on a recurring basis.

There are also planned initiatives to strengthen the e-commerce platform's positioning as a destination for those seeking quality products, focusing the offering on 1P products — and on the curated 3P marketplace, prioritizing sellers who use Magalu Entregas .

At the same time, the idea is to expand partnerships with other platforms, such as the one the company has with AliExpress . "Here we can access additional traffic, with very good profitability as well," says Rossini.

Investments in AI involve scaling AI Commerce as a new channel for growth and customer relationship management.

One of the moves is that Lu's WhatsApp will integrate the entire ecosystem, seeing that the audience that uses AI daily shows interest in interacting with virtual assistants. Magalu closed 2025 with 3 million unique users on this channel, with the conversion rate being three times higher compared to searching within the app.

The fifth pillar involves strengthening the leverage of financial services via MagaluPay, natively integrating financial services into the customer's purchasing journey.

“We still have a lot to leverage from this last cycle. We will have many new things, but it will all be connected to what we are already delivering, because we understand that there is much to improve,” says Rossini.

Magalu's shares closed the trading session down 6.37%, at R$ 9.40. Over the past 12 months, MGLU3 shares have risen 15.06%, bringing the market value to R$ 7.3 billion.