SAO PAULO, May 9 (Reuters) - Brazilian retailer Magazine

Luiza logged a net profit in the first quarter, it reported on

Thursday, reversing a year-ago loss as its financial expenses

shrank and core margins came up to a four-year high.

Magazine Luiza, one of the largest retailers in

Brazil, brought in a net profit of 27.9 million reais ($5.4

million) in the first quarter, in line with analysts'

expectations, as financial expenses came down around 40%.

The gains compare to a loss of 391.2 million reais in the

year-ago quarter.

Magazine Luiza reported net revenues up 1.9% year-on-year to

9.24 billion reais, slightly below the LSEG-compiled estimate of

9.48 billion reais, as sales rose at both brick-and-mortar

stores and on its marketplace platform.

Meanwhile, online sales of goods from its own stock fell 2%,

the third straight quarter of declines in the segment.

However, CFO Roberto Bellissimo told Reuters the segment

turned back to growth in April, also adding the month "was the

best in 2024" in terms of total sales for the company. According

to Magazine Luiza, overall sales rose by a "high-single digit"

in April.

Its core earnings, or adjusted earnings before interest,

taxes, depreciation and amortization (EBITDA), rose 53.5% to

687.8 million reais, against the analyst estimate of 700 million

reais.

Adjusted EBITDA margins hit 7.4%, up 2.5 percentage points

year-on-year to the highest in four years, according to the

firm, partially helped by a pass-through during last year of a

tax related to interstate purchases within Brazil.

Magazine Luiza has focused on turning a profit over the

past two years as interest rates in the country went up.

But now as the central bank has started a rate-cutting

cycle, the firm has start to deliver more profitable results,

and sees an opportunity to boost sales through investments in

the customer experience, Bellissimo said.

The firm added that it has temporarily closed six stores of

the 107 it owns in the state of Rio Grande do Sul, which has

faced deadly floods in the past few days.

($1 = 5.1426 reais)