Brazil’s largest fashion retailer beats quarterly profit expectations by 45 percent

New York - Lojas Renner SA reported on Thursday a quarterly net profit that was 45 percent higher year-on-year and greatly exceeded market expectations, helped by double-digit sales growth.

Brazil's largest fashion retailer issued a securities filing, indicating first-quarter net profit came in at 161.6 million reais (circa 41 million dollars based on new international accounting standards IFRS.)

Analysts had projected a profit of 128.2 million reais in the period, according to consensus estimates compiled by Refiniti.

"April is evolving according to our expectations and we have important retail events ahead of us such as Mother's Day and Valentine's," CFO Laurence Gomes said in a phone interview with Reuters, referring to expectations for the second quarter.

Same-store sales growth accelerated 12.7 percent, compared with 6.3 percent a year ago. Net revenue increased 18 percent while operational costs fell 4.6 percent. As a result, net margin rose 1.8 percent.

Gomes advanced the company’s plans to invest 700 million reais in 2019, including a new 150,000-square-metre distribution center in the Southeast of Brazil.

On the back of the news, the retailer’s stock closed 5.8 percent higher on Thursday.