Home / Knowledge / News / Fashion / Fashion retailer Lojas Renner Q3 sales rise 12.9%
Fashion retailer Lojas Renner Q3 sales rise 12.9%
Oct '13
LOJAS RENNER S.A. the second largest fashion retailer in Brazil announces its results for the third quarter (3Q13) and the first nine months of 2013 (9M13).

Results from the retailing operation

Net revenue from merchandise sales was R$ 906.9 million in 3Q13, corresponding to a growth of 12.9% compared to the same period in 2012. Sales in July recorded a similar performance to the beginning of the year, but with a strong turnover in winter merchandise, driven by lower temperatures and by more intensive promotional activities in the market.

In August, Fathers’ Day sales performed well and persistent cold weather was also an important factor in driving business. Finally, with the onset of warmer weather, September business reflected the favorable customer reception given to the new spring-summer collection.

Based on the Same Store Sales concept, in spite of the strong performance of 13.2% in 3Q12, 3Q13 sales recorded growth of 5.8%, reflecting buoyant sales in the months of July and August as well as the positive effects arising from changes being implemented in the product mix at Camicado.

Furthermore, if the negative impact of the social security charge on sales (equivalent to -1.4 p.p.) and the estimated effects of stores undergoing refurbishment (equivalent to -0.9 p.p.) are excluded, Same Store Sales would have posted an increase of 8.1% in 3Q13. This confirms that the macroeconomic environment has not resulted in any structural changes to consumer behavior so far.

In 9M13, Net Revenue from Merchandise Sales was R$ 2,580.9 million, representing a growth of 13.3% compared with 9M12. Same Store Sales were up 6.0% for the period.

The Company has been developing in its online sales channel through its website to complement the business conducted in the physical stores and to reach out to markets which Renner still does not serve. Already in its second year of operations, the E-commerce channel offers a full range of products, in 9M13, reporting sales of R$ 24.2 million and registering significant growth of 63.3% over the same period for 2012.

Gross profit from merchandise sales in 3Q13 was R$ 454.4 million, with a growth of 10.0% over the same period for 2012. Gross Margin from the Retailing Operation was 50.1% in 3Q13, 1.3 p.p. lower than the margin of 51.4% reported in 3Q12.

This variation is a consequence of a greater volume in turnover of winter goods compared to the product mix sold in 3Q12, as well as the social security charge on sales, which impacted negatively the Gross Margin by 0.7 p.p. for 3Q13. If this effect is excluded, Gross Consolidated Margin would have been 50.8%. Conversely, Camicado’s Gross Margin reported growth of 5.6 p.p in 3Q13, increasing from 40.3% to 45.9%.

In 9M13 Gross profit from merchandise sales was R$ 1,333.5 million, a growth of 10.3% compared with 9M12 while Gross Margin from the Retailing Operation was 51.7% against 53.1%, still impacted by higher inventory losses recognized in 1Q13 and related to the period of migration to the new security tag system. In this context, it is worth pointing out that following the conclusion of the second inventory cycle in August 2013, losses reverted to their historical levels.

Lojas Renner

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