Brazil's Lojas Renner keeps expansion bet after solid quarterly results

Lojas Renner SA, Brazil’s largest apparel retailer, will maintain its aggressive growth plans this year and strategy of developing both its online and physical footprint, an executive said after the company posted unexpectedly strong quarterly results.

In a filing on Thursday evening, Porto Alegre-based Renner reported first-quarter profit of 111.4 million reais ($31.6 million), well above a Reuters consensus estimate of 89.5 million reais, thanks largely to increased revenue.

The company also beat estimates for earnings before interest, taxes, depreciation and amortisation (EBITDA), and posted same-store sales growth, a measure of sales at stores open for at least 12 months, of 6.3 percent.

Renner credited a strong seasonal collection and an increased flow of clients for the revenue growth. Sales could have been greater had it not been for an unusual warm spell in March in much of Brazil, it added.

In an interview, Renner CFO and investor relations officer Laurence Gomes said the company was not backing off its plan to invest 620 million reais this year to open 70 new stores, even though it had only opened four in the first quarter.

He added that Renner was still developing its so-called ‘multi-channel’ strategy to make shopping more convenient by allowing pick-ups and returns of online purchases at physical stores, among other services.

“Multi-channel is continuing along the course of the year, and we’re passing through a moment where our business is changing,” Gomes said.

“Its essence isn’t changing, but we’re adapting to the behaviour of the consumer.”