Lojas Americanas Rises Most in 3 Months on Earnings Surprise; B2W Retreats

Lojas Americanas SA (LAME4), Brazil’s second- largest retailer by market value, posted the biggest gain in more than a month after reporting better-than-forecast earnings, helping spur the first rally in consumer stocks this week.

Americanas, based in Rio de Janeiro, rose 4 percent to 13.92 reais in Sao Paulo trading, the biggest jump since June 28. MSCI Inc.’s index of 11 Brazilian consumer discretionary stocks advanced 1.4 percent, trimming its worst weekly decline since 2008.

While retailers from Natura Cosmeticos SA to B2W Cia. Global de Varejo published second-quarter results that were worse than analysts anticipated, Americanas beat estimates with a 1.6 percent increase in net income. The company opened 70 new stores in Brazil in 2010 and 30 stores this year.

“They are in a very strong expansion process,” Renato Prado, an analyst at Fator Corretora, said in a telephone interview from Sao Paulo before the earnings release. Fator has a “buy” recommendation on the stock.

B2W, Brazil’s biggest online retailer and a unit of Americanas, fell 2.7 percent to 12.95 reais, after reporting a second-quarter loss. The company recovered most of an earlier 9.8 percent decline after Francois Bloquiau, B2W’s investor relations officer, said today on a conference call with analysts to expect sales growth of 10 percent or more in the second half of the year.

Profit Climbs

Lojas Americanas’s net income increased to 38.1 million reais ($23.9 million), from 37.5 million reais a year earlier, the company said late yesterday in a statement on its website. The median estimate for profit excluding some items was 37.9 million reais in a Bloomberg survey of seven analysts.

An Easter Sunday in April, compared with March last year, boosted sales o seasonal items such as chocolate eggs. Net sales rose 24 percent to 1.44 billion reais from a year earlier.

The stock extended gains as Investor Relations Officer Murilo Correa said in a conference call that the company is “optimistic” it will open 101 stores in 2011.

B2W’s net sales rose 3 percent to 982.6 million reais. The company has been facing logistics problems, as well as tougher competition in e-commerce and from imports, because of the stronger Brazilian real, according to Prado. The currency has climbed 10.4 percent against the dollar in the past 12 months.

“They’ve been growing below market rhythm and below expectations, so they’ve been losing market share,” Prado said.

B2W, the worst performer in the benchmark Bovespa index since the end of 2009, is under investigation by Brazil’s Justice Ministry over delays in deliveries at its online unit Americanas.com.

Delivery Delays

The ministry wants to find out if B2W’s goods are facing delays across the country after the Rio de Janeiro-based company was banned from selling product in its home state because of the problems, according to a June 10 statement.

Lojas Americanas slumped 7 percent this year, compared with a 58 percent decline for B2W and a 24 percent drop in the Bovespa benchmark index, which entered a bear market on July 27. The MSCI index of Brazilian consumer discretionary stocks is down 14 percent this week and 25 percent this year.

Net income for Natura, Latin America’s largest cosmetics company, fell to 188.1 million reais from 191.5 million reais a year earlier, the Cajamar-based company said in a regulatory filing July 20. The mean profit estimate by eight analysts compiled by Bloomberg was 212.8 million reais.

To contact the reporter on this story: Fabiola Moura in New York at fdemoura@bloomberg.net

To contact the editors responsible for this story: Helder Marinho at hmarinho@bloomberg.net; David Papadopoulos at papadopoulos@bloomberg.net

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