The biggest Brazilian fashion retailer - Lojas Renner S.A. reported a 15.5% year-on-year hike in third quarter ending September 30, 2014, sales.
Lojas Renner said third quarter revenue surged to R$ 1,047.1 million, up 15.5% from the prior year quarter, driven by good sales of its S/S collections and also excellent response on Father’s Day.
Similarly, same store sales registered a grocwth of 7.5% year-on-year in the reporting quarter, which the fashion retailer attributed to recovery in sales at its recently modernized stores.
Lojas Renner said it again surpassed the IBGE’s Monthly Survey of Trade indices in the third quarter of 2014, based on figures already announced up to August.
Third quarter of 2014 gross profit ascended 20.1% from a year ago quarter to R$ 545.7 million, while retail gross margins reached 52.1%, up from 50.1% in the same quarter of 2013.
“Gross margins benefited from appropriate inventory management as well as lower markdown levels of the winter collection,” Lojas Renner explained.
Selling expenses touched R$ 287.3 million in the quarter under review or 27.4% of revenue compared to 27.5% in third quarter of 2013.
In the same quarter, general and administrative expenses stood at R$ 98.8 million or 9.4% of sales and also down from 9.5% of revenue it recorded in the third quarter of 2013.
Renner’s net income totalled to R$ 83.4 million, a surge of 16.4% from the prior year quarter, while net margin stood at 8.0% against 7.9% in the same quarter of 2013.
Adjusted EBITDA from retailing operation reached R$ 142.6 million in the reporting quarter, a year-on-year improvement of 30.2%.
Adjusted EBITDA margin stood at 13.6% in the quarter under review versus 12.1% in the corresponding quarter of 2013.
According to Lojas Renner, improvement in EBITDA margins reflects a combination of good sales performance with an increased gross margin and good expense management.
Commenting on the results, the retailer informed, “All these results were accomplished against a background of high investments, contributing to Renner’s competitiveness in a longer term.”
During the quarter, Lojas Renner unveiled 10 new stores, four of them under the Renner name and three each under Camicado and Youcom and invested R$ 131.6 million in them.
