Shoppers Boost Renner’s Profit as Ibovespa Extends Monthly RallyNey Hayashi
Brazilian retailer Lojas Renner SA rose to a record as its earnings beat forecasts, helping the nation’s benchmark stock index extend a monthly gain even as the economy slows.
Drugstore chain Raia Drogasil SA also rallied as it joined Renner in posting quarterly results that topped analysts’ estimates. The earnings surprises came less than 24 hours after Brazil’s central bank shrugged off the malaise in Latin America’s largest economy and raised interest rates to tame inflation that it judges to be a bigger threat.
“Some companies manage to post good results even in a challenging economic scenario, and Renner is one of those that stand out,” Rafael Ohmachi, an analyst at brokerage firm Guide Investimentos, said by phone from Sao Paulo.
The Ibovespa added 1.6 percent to 56,229.38 at the close of trading in Sao Paulo. The gauge has rallied 9.9 percent in April on bets spending cuts proposed by President Dilma Rousseff and the release of Petroleo Brasileiro SA’s long-delayed results will be enough for Brazil to avoid a credit rating downgrade. Economists surveyed by the central bank see Brazil’s economy shrinking 1.1 percent in 2015, which would be the worst performance since a 4.2 percent contraction in 1990.
Renner posted adjusted net income of 73.2 million reais ($24.3 million), 38 percent above the average estimate of analysts surveyed by Bloomberg. The shares climbed 9.8 percent to 105.05 reais, the highest since October 1994.
Raia Drogasil, the nation’s largest drugstore chain by market value, rose 5.7 percent to a record 34.20 reais.
Trading volume of equities in Sao Paulo was 9.3 billion reais on Thursday, according to data compiled by Bloomberg. That compares with a daily average of 6.91 billion reais this year, according to the exchange. The Ibovespa entered a bull market April 24 after rising more than 20 percent from a January low.