Marisa (AMAR3) posted a net loss of BRL149 million in the first quarter, up 64.2% for the year

Marisa (LOVE3) posted a net loss of BRL 149 million in the first quarter of 2023, up 64.2% from BRL 90.7 million in the same period last year.

The increase in the loss comes despite the company’s difficulties, which increased its retail net sales by 1.3% to R$440.5 million.

“This growth was driven by better physical store sales, even taking into account the closure of 14 stores in the last 12 months leading up to March, and a 14.3% higher average price from R$42.81 to R$48.93 $”, explains Marisa in the document published on Monday evening (15). “The volume of parts sold decreased by 11.7%, from 12.9 million in the first quarter of 2022 to 11.4 million based on same-store sales.”

In physical stores, invoices for the year increased 5% to R$548.1 million. In the digital sector, the fashion retailer’s sales fell by 32.5% to R$43.1 million.

The company notes that its gross profit increased by 6% year-on-year to R$218 million, with a gross margin increase of 2.2 percentage points to 49.5%. The explanation for this would be the new value proposition, the better product range and the discount rationalization strategy.

Operating expenses remained stable year-on-year at R$260.5 million. However, other expenses increased by 163.6% to R$23.9 million due to store closures.

Retail EBITDA (earnings before interest, taxes, depreciation and amortization) rose 42.9% for the year but was still negative at R$36.1 million.

“The increases in retail sales and gross profit seen this quarter, along with the gradual reduction in operating expenses, will be key to diluting the volume of fixed costs in a short period of time and making a positive contribution.” “Ebitda for retail,” they discuss . “The company’s restructuring plan, implemented since February 2023, includes, among other things, the
Close branches with lower or loss-making profit margins and reduce costs and fixed costs throughout the year.”

At MBank, Marisa’s finance arm, Ebitda fell to negative R$14.4 million from a false R$17.9 million between January and March 2022. “The lower production of new loans and the increase in PDD provisions (for bad debts) led to an already expected Ebitda decline into negative territory given the still stable volume of operating costs and expenses,” he explains.

Marisa still recorded a negative financial result of R$84.1 million, up 83.8% from the financial loss of the first quarter of 2022.

“The decrease in net financial income is mainly due to the increase in interest rates in Brazil, which affects the AVP, and the monetary fluctuations related to tax processes,” he says.

The retailer’s net debt was R$461.6 million, down 21.4% quarter-on-quarter.

“Following the end of the first quarter, the company’s debt profile also improved with the contribution of R$90 million to the capital of subsidiary MPagamentos (via the issuance of debentures to Marisa by the majority shareholders),” they mention. “It is worth noting that the balance of our drawn risk, classified as loans and financing, was reduced from R$46.4 million to R$10 million during the quarter, reflecting the sudden closure of this nature of credit line for the supply of the sector is due to retail chain in Brazil”.

In the midst of the crisis, the company sought to protect its liquidity, with its working capital increasing from a negative balance of R$179.1 million to a positive balance of R$162.5 million. In addition, investments were reduced from R$17.6 million to R$3.4 million. As a result, the liquidity fluctuation increased from a deficit of BRL 140 million in the first quarter of 2022 to a deficit of BRL 40.7 million in this quarter.

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