Lojas Renner (LREN3) Plunges 7% Post-Earnings, But Analysts Call Q2 2025 Solid – What’s Going On?

• Why Did LREN3 Drop 7% Despite Strong Earnings?
• Analysts Weigh In: Is the Sell-Off Overdone?
• The Big Question: What’s Next for H2 2025?
• Should You Buy the Dip?
• FAQ: Your Burning Questions Answered

Lojas Renner (LREN3) shares took a nosedive on the Ibovespa (IBOV) this Friday (August 8), dropping over 7% after the company released its Q2 2025 earnings report. Oddly enough, analysts are calling the results "solid," even as uncertainty looms over the second half of the year. The Brazilian fashion retailer posted a net profit of R$404.5 million, up 28.4% year-over-year, with revenue climbing 18.5% to R$3.6 billion. Same-store sales (SSS) surged 18.6%, outperforming competitors like C&A and Guararapes. But why the market sell-off? Let’s break it down.

Why Did LREN3 Drop 7% Despite Strong Earnings?

On paper, Renner’s numbers look great. Gross profit hit R$2.1 billion (+20.4% YoY), and margins expanded by 0.9 percentage points to 57.1%, thanks to a favorable winter product mix. But investors seem spooked by rising operating expenses (+15.9% YoY to R$1.3 billion) and concerns about slowing growth in H2 2025. By mid-afternoon, shares were down 5.49% at R$17.05—making it one of the worst performers on the Ibovespa.

Analysts Weigh In: Is the Sell-Off Overdone?

calls the results "strong but expected," maintaining a neutral rating. They note that while apparel margins improved, higher costs and mixed performance at Realize (Renner’s fintech arm) offset gains., however, stays bullish, citing gross margin recovery and consistent execution. Their R$22 price target implies ~29% upside.praises Renner’s "masterful" SSS growth (18.6% vs. peers at 15-17%) and expects H2 tailwinds from higher disposable income.

The Big Question: What’s Next for H2 2025?

Here’s where it gets tricky.warns of "challenging comps" ahead, noting Q2’s strength offers little clarity on future sales.(most bullish at R$24.30 target) thinks margin expansion could cushion any slowdown. Meanwhile,and others sit on the fence, waiting to see how macro trends (inflation, rates) play out.

Should You Buy the Dip?

FAQ: Your Burning Questions Answered

Why did LREN3 fall after good earnings?

Market jitters about H2 2025 slowdown and rising costs overshadowed solid Q2 results. Some profit-taking likely played a role too.

Is Renner’s growth sustainable?

Analysts are split. Bulls point to margin gains and SSS strength; bears worry about tough comps and macro risks.

What’s the best price target for LREN3?

Santander’s R$24.30 target is the street high, implying ~43% upside from current levels.