S&P affirms Magazine Luiza at brAA- on sales outlook

S&P National Ratings affirmed the 'brAA-' issuer and issue credit ratings of Magazine Luiza on the Brazil National Scale on September 25, 2026. The agency also maintained the 'br3' recovery rating on the retailer's 10th and 13th senior unsecured debenture issuances, which indicates an expected 60% recovery in a hypothetical default scenario.

The stable outlook reflects expectations of a gradual recovery in sales and cash generation following weaker-than-expected results in the first half of 2026, especially in e-commerce. S&P expects growth to be supported by the online sales partnership with Mercado Livre and reduced competition following store closures by Casas Bahia, even as the environment remains challenging for Brazilian discretionary retail.

S&P lowered its 2026 financial projections, forecasting net revenue of around 39 billion Brazilian reais and higher working capital needs, which postponed expected deleveraging. The agency projects net debt to EBITDA around 4.0 times at the end of 2026, compared to 3.6 times previously, before declining to between 3.0 and 3.5 times in 2027 as sales and cash generation improve.

The source noted that Magazine Luiza shares rose 32% in September 2026.