Lojas Renner records 90.2% growth in net income for Q2
LOJAS RENNER S.A., the second largest apparel department store in Brazil, announces its results for the second quarter (2Q10) and the first semester of 2010 (1S10).
• Net Revenue from Merchandise Sales rose from R$ 554.7 million in 2Q09 to R$ 630.0 million in 2Q10, a growth of 13.6%. Same Store Sales were 7.4% up between the months of April and June. In 1S10, Net Revenue from Merchandise Sales was R$ 1,070.2 million versus R$ 917.4 million, while Same Store Sales were +10.5% against -4.0% in 1S09.
• Gross Profit from Merchandise Sales reached R$ 324.1 million in 2Q10 and Gross Margin from the Retail Operation was 51.4% representing an important increase of 4.1 percentage points. In 1S10, Gross Profit from Merchandise Sales was R$ 542.7 million, with Gross Margin recording 50.7%.
• Operating Expenses (selling, general and administrative) saw a reduction in relation to Net Revenue from Merchandise Sales, representing 30.5% of sales in 2Q10 against 32.1% in 2Q09. In the first semester, expenses were 33.9% against 36.2% in 1S09.
• Results from Financial Services were R$ 31.5 million in 2Q10, a growth of 85.5% on the R$ 17.0 million in 2Q09. In 1S10, Financial Services produced a result of R$ 63.9 million versus R$ 43.5 million in 1S09.
• The Renner Card posted a grand total of 16.0 million units in June, 2010 with the average ticket increasing by 7.4% to R$ 138.08 in 2Q10. In 1S10, the average ticket was R$ 128.31, a year-on-year improvement of 9.1%.
• EBITDA in 2Q10 was R$ 156.0 million, representing a growth of 57.8% compared with the R$ 98.8 million for the same period in 2009. The EBITDA Margin was 24.8% against 17.8% in 2Q09, a significant increase of 7.0 percentage points. In 1S10, EBITDA amounted to R$ 232.6 million and the EBITDA Margin reached 21.7%.
• The Company recorded growth in Net Income for 2Q10 of 90.2%, increasing from R$ 47.8 million in 2Q09 to R$ 91.0 million.
The second quarter of the year is traditionally marked by two dates of commercial importance: Mother's Day in May and the Brazilian version of St. Valentine's Day in June. Additionally, sales in this period are also impacted by lower temperatures with the onset of the fall-winter seasons.
The April-June period 2010 was characterized by a good sales performance in the light of a favorable environment for consumption driven by several macroeconomic variables, such as high levels of consumer confidence, declining unemployment and the increase in the number of jobs in the formal market. As a result, Net Revenue from Merchandise Sales grew 13.6% in 2Q10 and 16.7% in 1S10. Same Store Sales were up by 7.4% in 2Q10 and +10.5% in the period between January and June 2010.
The Company's businesses continued to report significant improvements in the quarter in line with operational initiatives implemented over the past few years. These involve supply chain developments, the rebalancing of quantities of domestically-made items vis-à-vis imports, improvement in inventory composition and procurement planning, as well as the fine-tuning of processes relating to the development of collections together with a greater understanding of the peculiarities of each region of the country. These initiatives have been instrumental in ensuring important gains in Gross Margin, which rose from 47.3% in 2Q09 to 51.4% in 2Q10, and from 47.3% in 1S09 to 50.7% in the first six months of the current year.