Lojas Renner S.A. the largest fashion retailer in Brazil, announces its results for the second quarter and the first half 2014 (2Q14 and 1H14).
Highlights of Second Quarter:
• Same Store Sales of +10.0%
• Gross Margin from the Retailing Operation of 54.2% (+0.7 p.p.)
• OPEX accounted for 34.1% of Net Revenue (-0.6 p.p.)
• Results from Financial Products were up by 27.3%
• Total Adjusted EBITDA Margin of 22.3% (+1.0 p.p.)
• Net Income 20.9% greater than 2Q13
The second quarter of the year was characterized by conjecture as to operations in the retail sector as a whole during the FIFA World Cup soccer tournament in the light of an expected reduction in customer traffic through the shopping malls and the larger number of associated holidays and pauses on days when games were being played.
However, at Renner the quarter saw a good sales performance thanks to the assertiveness of the collection, correct allocation of products and inventory management, so enabling the Company to report growth of 17.3% in Net Revenue and 10.0% in Same Store Sales.
These factors contributed to Renner once again exceeding IBGE’s (the government statistics office) PMC – Monthly Survey of Trade indices based on data for the apparel and footwear sector already published up to May (+4.7%).
This performance confirms Management’s perception that the current macroeconomic scenario creates business opportunities for those operators which are better structured and have competitive advantages.
The Gross Margin from the Retailing Operation recorded a 0.7 p.p. improvement if compared with the same period in 2013, increasing from 53.5% in 2Q13 to 54.2%. Operating Expenses in turn reported a reduction of 0.6 p.p., accounting for 34.1% of Net Revenue from Merchandise Sales against 34.7% in 2Q13.
Adjusted EBITDA from the Retailing Operation recorded growth of 21.8%, totaling R$ 195.7 million, with an Adjusted EBITDA Margin from the Retailing Operation of 17.6% versus 17.0% in 2Q13.