Lojas Renner Announces Third Quarter 2025 Earnings Results

Core Insights - Lojas Renner S.A. reported its third quarter 2025 results, highlighting a solid performance despite challenges in the retail environment compared to 2024 [1][3] Sales Performance - Retail sales grew by 4.2%, with apparel sales increasing by 4.7%. The combined average growth for Q2 and Q3 reached 11.5%, with apparel at 12.5% [5] - The company experienced a temporary impact of approximately 2 to 3 percentage points on sales due to limited availability of winter items [4] Profitability and Margins - Apparel gross margin improved to 56.2%, a 0.5 percentage point increase, while retail gross margin increased by 0.4 percentage points to 55.1% [6][10] - Net income rose by 9% to R$279 million, with earnings per share increasing by 15.5% to R$0.2803 [10] Operational Efficiency - The company reported a trailing twelve-month ROIC of 14.4%, a 1.7 percentage point improvement, alongside free cash flow generation of R$473 million, the highest in the fashion industry in Brazil [8][10] - A temporary increase in expenses was noted, but the company maintains a structural trajectory of operational leverage initiated in 2024 [7] Digital and Omnichannel Strategy - The digital channel now accounts for 17% of total sales, supported by previous investments that enhance profitability [9] - Integration of online and physical operations has led to an 8 percentage point increase in the share of new inventory within e-commerce sales year-to-date [9] Expansion and Customer Engagement - The company opened 18 stores year-to-date, aiming for 30-37 openings by year-end, and completed 16 store renovations [11] - Realize CFI, a key driver of customer engagement, reported an increase of 37% in results, reflecting a healthy credit portfolio [8] Financial Position - The company ended the third quarter with a net cash position of R$1.3 billion, providing resilience to navigate adverse scenarios [12] - In 2025, R$1.4 billion has been distributed through interest on equity and share buybacks, with approximately 85% of the buyback program executed [12]