MGLU3 shares have fallen 52% this month, but the company sold more in October: Magazine Luiza released exceptional preliminary gross revenue data for the parent company on November 9. Physical stores grew 16%, and first-party (1P) e-commerce grew 14%, both compared to October 2025. For shareholders, it is the first concrete signal that the operational trend has turned.
What Happened to MGLU3?
MGLU3 shares spent October in a state of turbulence rare even for the retail sector: they plunged 58% in the October 26 session when Lula's reelection pushed future interest rates higher, and then fell another 12% on October 28 with a second wave of DI interest-rate increases. The stock closed the month near R$ 5 and sits at R$ 5.86 as of November 9. What changed is that beneath the surface, October sales tell a different story.
Magazine Luiza filed a material fact with Brazil's securities regulator, the CVM, on the evening of November 9 disclosing preliminary parent-company gross revenue data for October—the first time the company has done so. The stated reason was a "significant change in the competitive dynamics of the durable goods retail sector," both in physical stores and online channels, with effects the company deemed relevant to ensure the "broad and equitable dissemination" of information to all shareholders ahead of Q4 2026 earnings.
| Period | Physical stores | 1P E-commerce |
|---|---|---|
| Jan–Aug 2026 (YTD) | +8% | −12% |
| September 2026 | +12% | +5% |
| October 2026 | +16% | +14% |
All variations are compared to the same periods in 2025, according to the material fact. The turnaround in e-commerce is the most striking: the 1P channel went from a cumulative decline of 12% in the first eight months of the year to 14% growth in October—a 26-percentage-point swing in two months. In physical stores, growth doubled compared to the January–August pace, also without opening any new locations.
Why October Was Different: The Casas Bahia Factor
Magazine Luiza did not name competitors in the material fact, but the competitive context is clear. Casas Bahia filed for bankruptcy protection (recuperação judicial) on August 16, 2026, with R$ 17.3 billion in declared debt, and has since closed approximately 300 stores, a figure disclosed by Investor Relations Director Vanessa Rossini. According to a survey by Itaú BBA, about two-thirds of those closed units had a Magazine Luiza less than 400 meters away. The result shows up directly in the physical sales data.
BofA estimated that Casas Bahia held between 25% and 30% of the durable goods retail market. With store closures and supplier credit restrictions—a predictable consequence of bankruptcy protection—part of that market suddenly became available. For Itaú BBA, Magalu could capture up to R$ 7.5 billion in additional sales through 2027, with same-store sales growth close to 18% and projected net income of R$ 776 million, compared to R$ 266 million estimated before its competitor's bankruptcy filing. The bank also calculated that every 100-basis-point reduction in the interest rate curve would add about 11% to Magalu's earnings per share.
Marketplace expansion strategies also reinforced e-commerce. Magazine Luiza began selling products on Amazon in June, Mercado Libre in September, and Shopee in October. Since joining Mercado Libre, Magalu has registered about 330,000 sales on the platform, with a daily pace 25% higher than what Casas Bahia recorded on the same channel before its bankruptcy filing, according to Itaú BBA.
Q3 2026 Still Showed a Loss: Where the Math Doesn't Add Up Yet
The October preview is encouraging, but it does not erase what Q3 2026 brought. Magazine Luiza posted an accounting net loss of R$ 10.7 million in the third trimestre, reversing an 84.6 million real profit from the same period in 2025. On an adjusted basis, profit was R$ 13.9 million—down 34% year-over-year and well below the Bloomberg consensus estimate of R$ 31 million. Adjusted EBITDA totaled R$ 710.1 million with a 7.9% margin, and net revenue came in at R$ 8.9 billion, slightly below the R$ 9.0 billion reported in Q3 2025.
IR Director Vanessa Rossini acknowledged that results remain "penalized by interest rates." XP had already projected this Q3 2026 loss back in October, prior to the sales acceleration driven by Casas Bahia's store closures. In October, the company completed a R$ 1.0 billion payment on its 10th debenture issuance—an outlay that underscores the need for strong operational cash flow to honor obligations even while accelerating sales.
Magalu's structural challenge in the current environment is the gap between operations and finance: the company is selling more, but DI rates above 15% increase net financial expenses and raise consumer credit costs at the same time, compressing both margins and future demand for durable goods.
What the Material Fact Doesn't Say—and What Remains Uncertain
Magazine Luiza was explicit: the preview figures are managerial, preliminary, and unaudited; they do not constitute projections or promises of future performance, and the disclosure is exceptional and will not be repeated periodically. Final Q4 2026 results will only arrive with the annual financial statements on the date scheduled in the corporate calendar. October's sales acceleration must be confirmed in November and December for Q4 2026 to truly represent an inflection point in profitability.
From a valuation perspective, MGLU3 closed at R$ 5.86 on November 9—19.4% above the fair value of R$ 4.91 calculated by Rico aos Poucos, with a 448% dispersion between the most pessimistic and most optimistic methods. The P/E ratio stands at 51.4 and the fundamental analysis score is 3.9 out of 10. Citi downgraded the stock on November 7, two days before this preview—a sign that part of the market still does not view operational recovery as sufficient to offset the cost of capital and current leverage.
The preview raised the question that Q4 2026 will answer: Is October's gain permanent—because Casas Bahia is permanently yielding market share—or temporary—should the bankruptcy protection plan advance and allow the competitor to reorganize inventory and resume competitive commercial conditions? For now, October is a single data point, not a confirmed trend.
The preview is the most positive piece of news for Magalu in 2026—and the company released it outside the regular calendar precisely for that reason. If the sales pace persists, Q4 2026 could be the first quarter with consistently growing adjusted profit in two years. But as long as DI rates stay above 14%, debt eats away at earnings despite rising sales. Investors holding the stock on a thesis of falling interest rates have a new data point in their favor; those evaluating the company based on current fundamentals—a 3.9 score, high P/E, and negative margin of safety—have no reason to revise their thesis based on just one month of unaudited operational preview.
Q4 2026 Results — October data is managerial; the audited financial statements will show whether sales growth translated into profit. Keep an eye on Magalu's earnings release calendar.
January 2031 DI Rates — post-election levels near 15% are the primary obstacle to the operational thesis. Itaú BBA estimates that every 100-basis-point drop in interest rates adds about 11% to earnings per share. An inflection in the yield curve changes the math more than any sales preview.
Casas Bahia — Monitor the progress of the bankruptcy protection plan: if the competitor reorganizes inventory and reopens stores, part of Magalu's market share gains could reverse. If the process deepens with further store closures, October's figures may represent the floor rather than the ceiling.