# Magazine Luiza (MGLU3.SA)

Canonical: https://gigainvestors.com/s/MGLU3.SA

Analysis as of: 2026-10-16T07:41:50.145Z. Financial observations: FY2008–FY2025.

Listing currency: BRL. Reporting currency: BRL.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: BRL 10.39 per share; close as of 2026-10-15.

## Checklist

### understandable: fail

- 1 revenue decline in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 2

- Operating margin variation: 0.68×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.06×

- FY2017: 0.07×

- FY2018: 0.07×

- FY2019: 0.06×

- FY2020: 0.03×

- FY2021: 0.01×

- FY2022: 0.02×

- FY2023: -0.01×

- FY2024: 0.04×

- FY2025: 0.03×

### moat: fail

- Years with nonpositive invested capital use equity plus debt and leases; positive earnings with no positive capital are shown above 100%.

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 10.4%

- ROIC, second-lowest year: 2.5%

- Typical minus recent gross margin: 1.4 pp

- Typical gross margin (annual median): 28.0%

- Recent gross margin (lower of latest and 3-year median): 26.5%

- Years with nonpositive capital: 1

- Capital spending / revenue: 1.3%

- ROIC including acquisitions, ten-year median: 3.4%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 39.8%

- FY2017: >100%

- FY2018: 61.9%

- FY2019: 19.2%

- FY2020: 10.4%

- FY2021: 2.5%

- FY2022: 3.7%

- FY2023: -2.0%

- FY2024: 10.4%

- FY2025: 5.3%

### economics: fail

- owner earnings cash conversion below threshold

- working capital as a share of revenue rose more than 10pp and ends positive

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: BRL -239M

- Net income, five-year total: BRL -234M

- Return on incremental invested capital: 21.9%

- Working capital / revenue, annual change: 1.9 pp

- Working capital / revenue, change between three-year averages: 11.4 pp

- Working capital / revenue, final three-year average: 14.1%

Chart: Owner earnings · five years; fiscal year observations.

- FY2021: BRL -100M

- FY2022: BRL -769M

- FY2023: BRL -620M

- FY2024: BRL 809M

- FY2025: BRL 442M

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 61.9% vs 5.3%

- Per-share earnings: 0.15 to 0.26 (three-year endpoint medians)

- five-year and ten-year diluted share growth both above threshold

- acquired goodwill and intangibles (proxy) exceeds half of ten-year net income with low and deteriorating ROIC

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 2.6%

- Ordinary dilution, 5-year annual growth: 2.6%

- Market cap gain: BRL 4.9B

- Cumulative retained earnings: BRL 301M

- Diluted shares, 10-year annual growth: 2.6%

- Diluted shares, 5-year annual growth: 2.6%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 7.4%

- Per-share value change: BRL 0.11

- Per-share value, starting three-year median: BRL 0.15

- Per-share value, ending three-year median: BRL 0.26

- Buybacks concentrated in cheaper years (correlation): 0.10

- Average buyback yield: 1.2%

- Buyback history: 5 years

- Debt-funded buybacks: Yes

- Acquisition spending: BRL 6.3B

- Cumulative net income, 10 years: BRL 2.2B

- ROIC, first three-year median: 61.9%

- ROIC, last three-year median: 5.3%

Chart: Earnings per share; fiscal year observations.

- FY2016: BRL 0.15

- FY2017: BRL 0.64

- FY2018: BRL 0.91

- FY2019: BRL 1.31

- FY2020: BRL 0.56

- FY2021: BRL 0.82

- FY2022: BRL -0.70

- FY2023: BRL -1.38

- FY2024: BRL 0.61

- FY2025: BRL 0.26

### accounting: pass

- Sloan accruals: -39.2%

- Receivables to sales index (DSRI): 1.33×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.1%

- Earnings backed by cash: Yes

- Operating cash / earnings: 73.55×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.60×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -5.2%

- FY2017: 2.5%

- FY2018: -6.7%

- FY2019: 21.5%

- FY2020: -9.0%

- FY2021: 12.9%

- FY2022: -9.4%

- FY2023: -10.7%

- FY2024: -36.9%

- FY2025: -39.2%

## Holders

## Price story

Down 89% since Oct 2021 · sales +1.7%

Story as of 2026-10-16T10:00:12.131Z; price observation 2026-10-15.

### Sales · FY2024–2025

sales +1.7%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: BRL 9.5B 

- FY2017: BRL 12B 

- FY2018: BRL 16B 

- FY2019: BRL 20B 

- FY2020: BRL 29B 

- FY2021: BRL 35B 

- FY2022: BRL 37B 

- FY2023: BRL 37B 

- FY2024: BRL 38B 

- FY2025: BRL 39B 

### Gross margin · FY2025

gross margin 26.5%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: 30.7% 

- FY2017: 30.1% 

- FY2018: 29.1% 

- FY2019: 27.9% 

- FY2020: 25.8% 

- FY2021: 24.1% 

- FY2022: 28.0% 

- FY2023: 27.6% 

- FY2024: 30.6% 

- FY2025: 26.5% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in specialty retail; annual sales are BRL 38.7 billion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:41:50.145Z); FY2025: revenue 38703387000; grossProfit 10269764000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); MGLU3.SA: Magazine Luiza S.A. engages in the retail sale of consumer goods. It operates through Retail, Financial Operations and Other Services segments. The company also provides credit and financing services. In addition, it is involved in the provision of consortium administration services; and e-commerce of perfumes, cosmetics, and fashion products, as well as software development services. Further, the company provides logistics and technological solutions, as well as resale goods and provision of services in the stores, electronic and food delivery management platform. It serves through physical stores, e-commerce platform, and SuperApp. Magazine Luiza S.A. was founded in 1957 and is headquartered in Franca, Brazil. Magazine Luiza S.A. operates as a subsidiary of LTD Administração e Participação S.A.

### Why customers stay

Margins ranged from 26.5% to 30.6% during 2023–25; it earns 10.4% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:41:50.145Z); FY2023: grossProfit / revenue = 27.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:41:50.145Z); FY2024: grossProfit / revenue = 30.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:41:50.145Z); FY2025: grossProfit / revenue = 26.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:41:50.145Z); 10-year return on capital observations [[2016,0.39801603450803713],[2017,1.5942415293916776],[2018,0.6185257373432463],[2019,0.1923099940153882],[2020,0.10358600863252038],[2021,0.02456487028493487],[2022,0.037004734679823924],[2023,-0.019707596533544928],[2024,0.10396738163405642],[2025,0.05319036817459903]]; median 0.1037766951332884. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 8 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:41:50.145Z); FY2016: growth capex 0; upkeep 77302000; owner earnings 137294000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:41:50.145Z); FY2017: growth capex 0; upkeep 101995000; owner earnings 423988000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:41:50.145Z); FY2018: growth capex 126445000; upkeep 158627000; owner earnings 597429000. Growth capex / owner earnings = 0.211648580835547.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:41:50.145Z); FY2019: growth capex 34539000; upkeep 486975000; owner earnings 855713800. Growth capex / owner earnings = 0.04036279419590989.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:41:50.145Z); FY2020: growth capex 0; upkeep 543841000; owner earnings 45130200. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:41:50.145Z); FY2024: growth capex 0; upkeep 266600000; owner earnings 808698000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:41:50.145Z); FY2025: growth capex 0; upkeep 330687000; owner earnings 441928600. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:41:50.145Z); Dividend observations: [[2016,32369000],[2017,32369000],[2018,114273000],[2019,182000000],[2020,299405000],[2021,146133000],[2022,99966000],[2023,0],[2024,0],[2025,225000000]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 49.3% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); MGLU3.SA SharesStats.PercentInsiders = 49.289 percentage points; cache date 2026-10-16.

### What the price says

The price is 0.2 times annual sales.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:41:50.145Z); Closing price 10.39 BRL; reporting-to-trading FX 1; FY2025 annual sales per share 48.75668361621493; price multiple 0.21309898929517462. FY2025 cash earnings/share 0.556720602544599. Closing-price date 2026-10-15.

## Monthly share-price history (BRL per share)

- 2016-11: BRL 3.62 per share

- 2016-12: BRL 3.69 per share

- 2017-01: BRL 4.45 per share

- 2017-02: BRL 7.24 per share

- 2017-03: BRL 6.16 per share

- 2017-04: BRL 7.75 per share

- 2017-05: BRL 8.73 per share

- 2017-06: BRL 8.91 per share

- 2017-07: BRL 12.77 per share

- 2017-08: BRL 19.76 per share

- 2017-09: BRL 20.66 per share

- 2017-10: BRL 17.75 per share

- 2017-11: BRL 15.82 per share

- 2017-12: BRL 22.33 per share

- 2018-01: BRL 23.54 per share

- 2018-02: BRL 25.35 per share

- 2018-03: BRL 27.26 per share

- 2018-04: BRL 29.70 per share

- 2018-05: BRL 30.18 per share

- 2018-06: BRL 35.63 per share

- 2018-07: BRL 36.82 per share

- 2018-08: BRL 36.26 per share

- 2018-09: BRL 34.10 per share

- 2018-10: BRL 46.99 per share

- 2018-11: BRL 45.83 per share

- 2018-12: BRL 50.40 per share

- 2019-01: BRL 49.85 per share

- 2019-02: BRL 48.29 per share

- 2019-03: BRL 48.12 per share

- 2019-04: BRL 53.24 per share

- 2019-05: BRL 54.56 per share

- 2019-06: BRL 58.77 per share

- 2019-07: BRL 73.41 per share

- 2019-08: BRL 80.82 per share

- 2019-09: BRL 82.49 per share

- 2019-10: BRL 99.41 per share

- 2019-11: BRL 100.28 per share

- 2019-12: BRL 106.23 per share

- 2020-01: BRL 124.26 per share

- 2020-02: BRL 112.51 per share

- 2020-03: BRL 86.83 per share

- 2020-04: BRL 110.68 per share

- 2020-05: BRL 143.30 per share

- 2020-06: BRL 159.56 per share

- 2020-07: BRL 179.74 per share

- 2020-08: BRL 207.60 per share

- 2020-09: BRL 198.64 per share

- 2020-10: BRL 219.40 per share

- 2020-11: BRL 208.27 per share

- 2020-12: BRL 222.25 per share

- 2021-01: BRL 225.10 per share

- 2021-02: BRL 215.39 per share

- 2021-03: BRL 180.29 per share

- 2021-04: BRL 178.42 per share

- 2021-05: BRL 179.58 per share

- 2021-06: BRL 188.40 per share

- 2021-07: BRL 183.50 per share

- 2021-08: BRL 162.48 per share

- 2021-09: BRL 127.74 per share

- 2021-10: BRL 96.29 per share

- 2021-11: BRL 69.48 per share

- 2021-12: BRL 64.31 per share

- 2022-01: BRL 62.35 per share

- 2022-02: BRL 53.54 per share

- 2022-03: BRL 60.75 per share

- 2022-04: BRL 43.47 per share

- 2022-05: BRL 33.14 per share

- 2022-06: BRL 20.84 per share

- 2022-07: BRL 22.98 per share

- 2022-08: BRL 38.04 per share

- 2022-09: BRL 39.91 per share

- 2022-10: BRL 39.82 per share

- 2022-11: BRL 30.38 per share

- 2022-12: BRL 24.41 per share

- 2023-01: BRL 39.46 per share

- 2023-02: BRL 31.98 per share

- 2023-03: BRL 29.48 per share

- 2023-04: BRL 29.75 per share

- 2023-05: BRL 33.85 per share

- 2023-06: BRL 30.02 per share

- 2023-07: BRL 29.84 per share

- 2023-08: BRL 24.59 per share

- 2023-09: BRL 18.88 per share

- 2023-10: BRL 11.85 per share

- 2023-11: BRL 17.99 per share

- 2023-12: BRL 19.24 per share

- 2024-01: BRL 18.71 per share

- 2024-02: BRL 20.29 per share

- 2024-03: BRL 17.14 per share

- 2024-04: BRL 12.95 per share

- 2024-05: BRL 11.80 per share

- 2024-06: BRL 11.48 per share

- 2024-07: BRL 10.54 per share

- 2024-08: BRL 11.58 per share

- 2024-09: BRL 9.24 per share

- 2024-10: BRL 9.01 per share

- 2024-11: BRL 8.60 per share

- 2024-12: BRL 6.19 per share

- 2025-01: BRL 7.10 per share

- 2025-02: BRL 6.81 per share

- 2025-03: BRL 9.67 per share

- 2025-04: BRL 8.88 per share

- 2025-05: BRL 8.78 per share

- 2025-06: BRL 9.38 per share

- 2025-07: BRL 6.72 per share

- 2025-08: BRL 7.80 per share

- 2025-09: BRL 9.14 per share

- 2025-10: BRL 8.07 per share

- 2025-11: BRL 9.79 per share

- 2025-12: BRL 8.94 per share

- 2026-01: BRL 9.79 per share

- 2026-02: BRL 9.35 per share

- 2026-03: BRL 8.77 per share

- 2026-04: BRL 8.23 per share

- 2026-05: BRL 5.98 per share

- 2026-06: BRL 4.68 per share

- 2026-07: BRL 5.03 per share

- 2026-08: BRL 4.81 per share

- 2026-09: BRL 7.46 per share

- 2026-10: BRL 11.36 per share

## Annual estimated value (BRL per share)

- FY2016: low BRL 3.31 per share, central BRL 3.40 per share, high BRL 3.50 per share

- FY2017: low BRL 4.02 per share, central BRL 4.14 per share, high BRL 4.27 per share

- FY2018: low BRL 3.55 per share, central BRL 4.29 per share, high BRL 4.56 per share

- FY2019: low BRL 13.44 per share, central BRL 15.59 per share, high BRL 16.37 per share

- FY2020: low BRL 12.17 per share, central BRL 12.78 per share, high BRL 13.47 per share

- FY2021: low BRL 16.21 per share, central BRL 18.33 per share, high BRL 19.39 per share

- FY2022: low BRL 3.36 per share, central BRL 3.53 per share, high BRL 3.59 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.