Brazilian retailers from Cia. Brasileira Distribuicao Grupo Pao de Acucar to Natura Cosmeticos SA (NATU3) are reporting the most disappointing profits in three years as rising debt and inflation hinder consumer spending.
Fourth-quarter earnings at Pao de Acucar, Natura, Lojas Renner SA and Cia. Hering (HGTX3) trailed analysts’ per-share estimates, according to data compiled by Bloomberg. The last time that many retailers on the benchmark Bovespa index fell short was in the first quarter of 2010.
Shoppers who helped prop up the economy in recent years are starting to pull back, with retail sales surprising analysts by falling in December from a month earlier. Retailers trading at a 46 percent premium to the Bovespa reflect optimism that growth will accelerate and unemployment remain near a record low, said Jorge Simino, chief investment officer at pension fund Funcesp.
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