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Oct. 27 (Bloomberg) -- Lojas Renner SA, Brazil’s biggest publicly traded clothing retailer, said third-quarter profit fell 0.5 percent as sales growth slowed due to the country’s weaker economic expansion and colder weather in the southern and southeastern regions.
Net income dropped to 56.7 million reais ($33.2 million) from 57 million reais a year earlier, the Porto Alegre-based company said today in a statement. The results missed the average estimate of 64.5 million reais in a Bloomberg survey of seven analysts.
“The reversion in the country’s macroeconomic scenario combined with unfavorable weather conditions created a challenging environment for the fashion retail business,” Renner said in the statement sent to the Website of Brazil’s securities regulator.
Sales increased 15 percent to 741.9 million reais from 643.9 million reais a year earlier. Sales at stores open at least a year rose 3.8 percent. Renner opened 12 stores in the first nine months of the year and had 146 stores by the end of September.
Brazil’s retail sales fell 0.4 percent in August, the biggest drop since March 2010, while the economic activity index shrank in August by the most in three years.
The company will hold a teleconference on the results tomorrow at 11 a.m. New York time.
“Investors will likely focus on the tone of the conference call, to gauge management’s perception about the extent of the impact of poor weather and whether there is a stronger than- expected deceleration going on,” Itau BBA analysts Juliana Rozenbaum and Francine Martins wrote in a report e-mailed to clients dated Oct. 19.
Lojas Renner rose 3.8 percent to 57.10 reais in Sao Paulo trading. The stock is up 1.2 percent since the beginning of the year, compared to a 14 percent drop for the Bovespa benchmark index.
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