October 25, 2018 / 8:01 PM / a year ago

Brazil's Via Varejo confident it will improve margins, sales in Q4

SAO PAULO, Oct 25 (Reuters) - Via Varejo SA, Brazil’s largest electronics retailer, is set to boost sales and improve margins in the fourth quarter, executives said on Thursday, as the rollout of a new sales platform and a stricter credit policy begin to bear fruit.

The retailer, owned by France’s Casino Guichard Perrachon SA , reported that it swung to a loss in the third quarter, sending shares down almost 3 percent at the opening bell.

The performance of Via Varejo, which operates under the Ponto Frio and Casas Bahia banners, has diverged in recent quarters from that of digitally focused retailers like Magazine Luiza SA and B2W Cia Digital SA, with which it is often compared.

But shares soon reversed course amid bets the company will soon receive boosts from various e-commerce and back-office initiatives, whose clunky rollout held back the firm in the third quarter. Common stock climbed 4.2 percent in afternoon trade, above the benchmark Bovespa equities index, which was up 1.7 percent.

“We’re optimistic that there will be solid execution this coming quarter,” Chief Operating Officer Paulo Naliato said in a call with analysts.

Via Varejo’s quarterly results were hit by the implementation of its new Via+ digital sales platform, which required changes to Via Varejo’s digital infrastructure in the third quarter. The company also rolled out a tighter credit policy, which hit short-term sales but will result in fewer provisions in the long term, executives said.

“It was key that we implemented (those new platforms) in order to go through a learning period, so that we can go into the fourth quarter reaping the benefits of those changes,” Naliato said. (Reporting by Gabriela Mello Writing by Gram Slattery editing by Jonathan Oatis)

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