April 30 (Bloomberg) -- Cia. Brasileira de Distribuicao Grupo Pao de Acucar, Brazil’s biggest retailer, slumped to a two-week low after reporting first-quarter net income that trailed analysts’ estimates.
The shares fell 2.9 percent to 107.27 reais at 11:41 a.m. in Sao Paulo. A close at that level would be the lowest since April 17. It was the biggest loser on the MSCI Brazil/Consumer Staples Index, which rose 0.9 percent.
The Sao Paulo-based retailer’s adjusted net income was 236.6 million reais ($118.2 million) in the first quarter, according to data compiled by Bloomberg after the company released earnings yesterday after markets closed. The average estimate of eight analysts surveyed by Bloomberg was 259.5 million reais.
Non-recurring expenses including the opening of new stores and a brand’s expansion to new regions “impacted the food division,” Ricardo Boiati, a Sao Paulo-based analyst at Banco Bradesco SA, wrote today in a research note to clients. Boiati downgraded the stock to an equivalent of hold, saying the results brought no surprises and citing a “rich” valuation.
Pao de Acucar trades at a 21.9 price-to-earnings ratio for the next four quarters while the Ibovespa is at 11.3 times, according to data compliled by Bloomberg.
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