Magalu shares fell 4.8% and returned to the level of the worst moment of the epidemic

Magazine Luiza (MGLU3) shares fell 4.83% this Wednesday (17/11), at R$9.27 on B3, the Brazilian Stock Exchange, and returned to the level of the worst moment of the pandemic. This is the lowest value since April 3 last year, when it closed at R$8.86.

The company’s shares had already posted a strong drop on Tuesday (11/16), when it ended the day at R$9.74, after a 12.65% drop.

The e-commerce giant saw its market value drop after a period of good harvest at the end of last year. In November 2020, Magazine Luiza’s shares were valued at R$27.39, which is the highest level so far.

According to a survey by Economatica, a company that conducts studies on B3, the market capitalization of the retailer in October 2020 was R$159,681,253. Last month, it fell to R$71,376,727 – a decline of R$88 billion, which is 55.3%.

The negative results came after the company revealed a decline in its profits during the third quarter. According to the company, adjusted profit from July to September was R$22.6 million, down nearly 90% compared to R$215.9 million a year earlier. The scenario mainly affected physical stores, which saw an 8% decrease in the period.

The company justified the slowdown in sales due to lower consumer power for Brazilians, as well as higher inflation and interest rates. According to the company, these factors were responsible for the negative picture in the stock market.

The Ibovespa, the main stock exchange index, also posted a strong decline this Wednesday by 1.39%, falling to 102,948 points – the lowest level since November last year.

As a result, the exchange accumulated a decline of 0.53% in the month and 13.5% in the year.