Lojas Renner Q4 sales surge, but profits miss expectations

Lojas Renner, a leading Brazilian fashion retailer, reported a 9.7 percent surge in fourth-quarter sales, reaching 4.17 billion Brazilian real, and an 8.2 percent annual sales increase to 12.7 billion Brazilian real, driven by higher volume and transaction numbers.

However, despite this revenue growth, quarterly net profit fell to 487.2 million Brazilian real, significantly below the 630.6 million Brazilian real forecast in an LSEG poll. Adjusted EBITDA also declined to 963.1 million Brazilian real.

CEO Fabio Faccio emphasized, "Our completed investment cycle in 2024 strengthens our competitive position for accelerated growth and profitability, as reflected in our fourth-quarter operational results."

In response, the company's board approved a share buyback program for up to 75 million shares, approximately 7 percent of outstanding shares. However, according to a Reuters report citing Santander analysts, "The substantial share buyback program will not significantly mitigate a potential sell-off as investors recalibrate expectations for a challenging 2025."

Faccio maintained, "We believe our current share price undervalues our demonstrated growth and future potential. While we anticipate significant external challenges in 2025, likely impacting industry performance, we are actively shaping our own path forward."