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Lojas Renner records growth in net income for Q1
03
May '10
LOJAS RENNER S.A., the second largest apparel department store in Brazil, announces its results for the first quarter 2010 (1Q10).

The apparel retailing business in the first quarter of the year is characterized by reduced sales volume in relation to the rest of the year. This reflects the seasonal squeeze on household incomes due to the spike in tax payments and school enrollment fees, not to mention additional expenditures incurred during the summer vacation period. There is also a natural tendency to cut spending following yearend purchases as consumers begin to pay down debt contracted in the preceding quarter.

Also at play this year were some particularly important aspects relating to the recovery in consumption and improvement in the macroeconomic environment.

In spite of heavy rainfall early in the year in the Southeast Region, the weak comparative base of the first quarter 2009 was instrumental in the Company reporting a robust sales performance with a growth of 21.4%, as well as when measured on a Same Stores Sales basis - up 15.1% in 1Q10. The gross margin from the retailing operation amounted to 49.7% in 1Q10 against 47.1% in 1Q09 and in turn an EBITDA margin of 17.4% in 1Q10 versus 11.6% in 1Q09. Store productivity during the quarter is also worthy of note, Net Revenue per m2 posting growth of 11.3% and increasing from R$ 1,579 per m² to R$ 1,757 per m2.

Operational initiatives contributed positively to sales performance and margin gains in 1Q10 and should continue to do so during the current year. Such initiatives include development of the supply chain, adjustments in the proportion of domestic versus imported items, improvements in the make-up of inventory and of procurement planning as well as upgrading of processes for the development of collections and a greater understanding of the specific characteristics of each geographical region. Marketing strategies associated to the Preview of the fall/winter collection and the launch of the new edition of the Renner Magazine also made a contribution to sales during this period.

Lojas Renner closed the first quarter of the year with some very positive results in contrast to the same period in 2009 when the impact of the world crisis left consumers more cautious in their buying habits and the Company was at a transitional phase preparatory to a period of recession which was looming.

Click here for more details.

LOJAS RENNER S.A.

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