Nov. 11 (Bloomberg) -- Lojas Americanas SA, Brazil’s second-largest retailer by market value, reported third-quarter profit that beat analyst estimates even after falling 7.5 percent, as the company’s discounted prices continued to attract customers amid an economic slowdown.
Lojas Americanas’ net income attributable to the holding company before extraordinary items declined to 49.2 million reais ($28 million), from 53.2 million reais a year earlier, the Rio de Janeiro-based company said in a statement published on its website. The average estimate of ten analysts surveyed by Bloomberg was for adjusted net profit of 35.9 million reais.
Net sales climbed 14 percent to 1.37 billion reais in the quarter. Consolidated net sales, which include the company’s subsidiaries, rose 6.2 percent to 2.37 billion reais.
Lojas Americanas’ sales remain strong because its prices are low and customers don’t need to rely on credit, Raymond James analysts Daniela Bretthauer and Leonardo Liborio wrote in a report dated Oct. 16.
Brazil’s central bank raised interest rates five times this year through July to tame inflation and slow credit growth, before reducing the benchmark Selic rate last month by half a percentage point, to 11.5 percent, the second cut since August. Brazilian retail sales rebounded in September, rising 0.6 percent, after a 0.4 percent slump in August, the biggest decline in 17 months, the national statistics agency said yesterday.
“Americanas remains one of the most prized growth stories within our retail universe,” Banco BTG Pactual SA analysts Fabio Monteiro, Joao Mamede and Lucas Suemitsu wrote in a report today. “Together with a resilient top line and proven execution, this provides the backdrop for a long-term phase of sustainable growth at relatively low risk.” They have a “Buy” rating on the stock.
Lojas Americanas opened 70 stores in Brazil in 2010 and 51 stores in the first nine months of the year. The company expects to open a total of 91 stores this year, which is at the lower end of its forecast range of 90 to 100.
Lojas Americanas preferred shares rose 3.7 percent to 15.25 reais in the Sao Paulo trading.
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