Consumer stocks stand out between rises and falls on the stock market

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The environment of greater economic uncertainty, with rising interest rates and uncomfortable and persistent inflationary pressure, hit some of the main companies in the consumer sector with shares on the Stock Exchange.

After the release of quarterly balance sheets the day before with numbers well below analysts’ expectations, and facing a challenging scenario for 2022, Magazine Luiza and Natura shares plummeted 18.3% and 17.5%, respectively, representing the largest day lows on the Stock Exchange. In the session, the Ibovespa had a drop of 1.1%.

“A rise in interest rates, with prospects of continuing to rise, combined with rising inflation, takes away the population’s purchasing power, which ends up directly impacting these sectors,” says Pietra Guerra, stock specialist at Clear Corretora.

Relative to Magazine Luiza, massive stock sales responded to rather weak numbers in the third quarter, when adjusted earnings fell about 90% year-on-year.

Analysts at Ativa Investimentos point out that the company’s profitability was negatively impacted by the worsening macroeconomic environment, with inflation, rising interest rates and a reduction in the population’s income, in addition to the growing share of e-commerce in total sales, which continued to pressure gross margin.

“The company signaled a continuation of a challenging outlook in the physical channel due to the macro scenario”, points out the XP analysis team. Sales in physical stores fell 8% in the period.

According to Rodrigo Crespi, an analyst at Guide, physical retail is the channel through which people end up concentrating purchases of durable goods at higher prices, and in many cases using financing. With the highest interest, these purchases are penalized, points out the expert.

President of Magazine Luiza, Frederico Trajano stated that at the end of September he had a 100-day inventory turnover in stores, compared to a level he considers healthy of 70. He said he intends to drain this excess between Black Friday and his traditional New Year promotion.

The extra inventory made the company record a provision of BRL 395 million in the third quarter that ended up helping to bring down the company’s profit in the period. “We weren’t expecting the slowdown that occurred in sales of physical stores in the third quarter and we ended up with larger inventory,” said Trajano, in a conference call with industry analysts this Friday.

According to Trajano, Magazine Luiza, which until the third quarter had been sparing in promotions and events to avoid crowding of customers in its stores due to fears related to the pandemic, changed tactics as of last month.

“The order is to agglomerate… We were very responsible in taking care to set an example, but as of October we have an order to agglomerate to have a lot of people in stores, but this, obviously given the economic context, is still very complicated “, said Trajan.

Reviews weigh on Natura

In the case of the cosmetics manufacturer Natura, in addition to the results of the third quarter itself, the signal transmitted by the company’s board of directors regarding the prospects for the evolution of the operation in 2022 also weighed on the performance of the shares.

In a statement released on Thursday (11), together with the balance sheet for the quarter below expectations, Natura said that, given a challenging operating environment that was not expected, with inflationary pressure, interruption of supply chains and exchange rate effects, projections for achieving certain financial metrics had to be postponed to the end of 2024, compared to December 2023 previously.

“Natura presented a result below our expectations, pressured by the strong comparison base with 2020 and by a challenging scenario in most of its markets”, highlights the Ativa Investimentos team.

XP’s team of analysts points out that the company’s consolidated net sales fell about 4% year-on-year. “However, the negative highlight was profitability, with synergies with Avon being overshadowed by cost/exchange pressures,” experts say.

​American companies in high and provisioning on the track

On the other hand, within the same consumption segment on the Stock Exchange, there were also cases of stocks such as the Americanas, with results that were much more pleasing to investors, with the shares marking the biggest increase of the day on the Stock Exchange, with gains of 5.8% .

Bradesco BBI analysts highlighted that Americanas had a good result, with gross revenue growth via the digital platform of 30%, surpassing Mercado Livre and Magazine Luiza for the first time in a year.

“We expect this to accelerate in the fourth quarter of 2021, given the easier basis for comparison,” added Richard Cathcart and team, in a report to clients.

For analysts, the diversification of Americanas’ online mix should be an advantage as Black Friday approaches, given the weakening demand for higher value discretionary items.

“It will be important now for Americanas to maintain this leadership in growth and begin to show the operational gains (financial and strategic) from the merger between the stores and the e-commerce businesses.”

Via shares also closed in a positive field, but with much more moderate gains, with an advance of 0.64%, but after a fall of 12.5% ​​in the last session.

According to XP analysts, the company’s numbers came in line with expectations, but with an announced provision of R$ 1.2 billion related to labor lawsuits weighing negatively.

Inter’s analysis team points out that the provision of labor litigation translates into operational weaknesses that should have already been mapped and remedied. “This point will be closely followed by our team in the coming months.”

Also on the rise within the consumer sector were the shares of fashion group Soma, with an appreciation of 0.26%, after the apparel company reported a profit of BRL 174 million in the third quarter, reversing a loss recorded a year earlier, with gross revenue soaring 160%.

“Looking forward, the company highlights that it is optimistic about the fourth quarter of 2021 and 2022 due to the performance of the wholesale collection, while it hopes to pass pressure from costs onto prices, thereby protecting profitability,” XP analysts say.

Manager of the Versa Long Biased fund, Luiz Alves says that his main bet in the portfolio today is Soma’s shares, but also positions in other consumer stocks, such as Vivara, Guararapes and Marisa.

According to him, it was possible to clearly identify in the results of the third quarter that the inflationary economic impact affected the results of companies aimed at the lower-income population much more severely.

“The issue that is talked about a lot about the pandemic having increased inequality appeared in the results very clearly”, says Alves.

(With Reuters)

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