Lojas Renner Climbs to Record as Profit Beats Estimates on Credit Demand

Lojas Renner SA, Brazil’s biggest publicly traded clothing retailer, climbed to a record after second-quarter profit surged 90 percent, beating analysts’ estimates.

The shares rose the most in two months, gaining 8.2 percent to 58.96 reais at the close of trading in Sao Paulo at 4 p.m. New York time.

Net income rose to 91 million reais ($51.8 million) from a year earlier, Renner said in a regulatory filing yesterday after markets closed. Ten analysts in a Bloomberg survey had an average estimate of 74.3 million reais in profit.

The results were “better than our bullish estimates,” JPMorgan Chase & Co. analysts led by Andrea Teixeira wrote in a note to clients yesterday. Renner benefited from growing credit demand as Brazil’s economy recovered from last year’s recession, the analysts said.

Central bank minutes published yesterday said growth may have slowed to “sustainable” levels, signaling policy makers may raise interest rates less than previously expected.

JPMorgan reiterated its “overweight” rating on the stock, saying Renner is now its “top pick” among Brazilian retailers.

To contact the reporter on this story: Alexander Cuadros in Sao Paulo at acuadros@bloomberg.net

• Tweet
• More
  • Business Exchange
  • Buzz up!
  • Digg
• Print
• Email