Bloomberg News

Lojas Americanas Fourth-Quarter Profit Beats Estimates

March 02, 2012

Lojas Americanas SA (LAME4), Brazil’s second-largest retailer by market value, posted fourth-quarter profit that beat analysts’ estimates as sales growth outpaced an increase in costs. Online unit B2W Cia. Global de Varejo had its fifth consecutive loss.

Lojas Americanas’s quarterly net income rose 14 percent to 180.2 million reais ($105 million), above the average estimate of nine analysts surveyed by Bloomberg for a profit of 170 million reais after extraordinary items. B2W’s loss widened to 28.8 million reais from a year earlier, according to a statement on the company’s website today.

The results “confirm Lojas Americanas’ impressive ability to work its mix into very high gross margins and good expense control,” Juliana Rozenbaum, an analyst at Banco Itau BBA SA, wrote in a report note to clients today. B2W showed “sustained weakness” that overshadows the “strength” of Lojas Americanas, said Rozenbaum, who has a “market perform” recommendation for both Lojas Americanas and B2W.

Lojas Americanas preferred shares fell 1 percent to 18.12 reais in Sao Paulo at 11:22 a.m. as B2W dropped for a sixth day in seven, losing 4.8 percent to 10.02 reais. Lojas Americanas jumped 28 percent this year before today, compared with B2W’s 17 percent gain and an 18 percent rise in the Bovespa benchmark index.

B2W Questioned

Net sales rose 7 percent to 3.14 billion reais, while B2W sales rose 2 percent to 1.18 billion reais. The Rio de Janeiro- based company opened 90 stores in 2011, below the target of 101 new stores. The company plans to open 400 stores in Brazil through 2013.

B2W earnings raises questions about its ability to turn around without further help from the controlling company, Rozenbaum said.

B2W had logistics problems in 2011 that led to delays in deliveries. Local regulators temporarily banned the company from selling goods in the Rio de Janeiro and Sao Paulo states, after receiving about 20,000 consumers’ complaints, and Brazil’s Justice Ministry is also investigating the delays.

The online retailer result was slightly better than the mean estimate for a net loss of 29 million reais in Bloomberg survey with ten analysts.

To contact the reporters on this story: Fabiola Moura in Sao Paulo at; Katerina Petroff in Sao Paulo at

To contact the editor responsible for this story: Helder Marinho at

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