Magalu wants to reduce excess inventory of merchandise after a surprise in the 3rd quarter

O Magazine Luiza finished the third trimaster with a spin from inventory from products from 100 days at a level thatfromra healthy from 70 e pretenfrom drain this excess between the Black Friday and your traditional promotion from start from year, said the presidentfrombefore the company this Friday (12).

The extra inventory caused the company to record a provision of R $ 395 million in the third trimaster who ended up helping fromreduce the company’s profit in the period by almost 90% and put pressure on the company’s shares to fall from 16% at 4:20 pm.

“We weren’t expecting the fromslowdown in sales of physical stores in the third trimaster and we end up with inventory bigger”, said the president.frommember of the company, FrefromRico Trajano, on a conference call with industry analysts.

“We thinkfromnt work with the provision to bring the inventory for a smaller spin in fromDecember and early next year. Of course, you end up promoting these items to sell the inventory“, said the executive.

According to the financial director, Roberto Rodrigues, were it not for the provision, the profit of the Magazine Luiza from July to September would be practically R$ 400 million more than the R$ 22.6 million disclosed the night before.

Rodrigues stated that the provision will be gradually reversed as the company reduces inventorys. He explained that the inventoryjust aren’t from obsolete and assembled products fromsfrom the beginning of the year amidst the problems from logistics brought by panfrommia that made the company fear being left without merchandise enough.

O Magazine Luiza, whose physical stores sellfromm notably household appliances and electronics whose costs vary strongly with the exchange rate, he even bet that sales would be more heated in the second half of the year, Rodrigues said.

The executive stated that the company was optimistic about the progress of the programs from vaccination and withdrawal from measures from social isolation, something that dustfromlaugh to foment the flow from customers in physical stores, even though the economic scenario in the country has already fromdeteriorating, with increase from inflation and interest and fromsvaluation of the real.

Trajano acknowledged that, in the “very short term”, the situation of the company’s physical stores, which work in harmony with the platform from company’s e-commerce, will continue “fromswindler”, but that this is no reason for the company to change its mode.fromit from Business.

“I believe we will continue in a more fromswindler still…But we have a track record from recover from difficult times”, said the president.fromnte do Magazine Luiza. “No problem from mofromit from business, it is a macroeconomic problem”, he added.

According to Trajan, the Magazine Luiza, that until the third trimaster had been being restrained at promotions and events to avoid crowding from customers in your stores by account from fears related to panfrommia, changed tactics from last month.

“A orfromm is to agglomerate…We were very responsible in terms of care from we set an example, but from from october we are with octoberfromm from crowding together to have a lot of people in store, but this, obviously given the economic context, is still very complicated”, said Trajano during the conference call.

The executive explained that the Magazine Luiza will continue to invest in new categories from products to increase recurrence from customer purchases from your digital platform, from similar way to what has been fromdeveloped by rival American, whose shares rose 5.8% this Friday.

One of the main bets of Magazine Luiza in this sense is the category from fashion, which already has more from 300 marks and 21 thousand comefrompains and the company’s own brand.