Brazilian retailer Cia Brasileira de Distribuicao has posted a 27% fall in first-quarter profits as higher costs offset an increase in revenues.

CBD, which is known locally by its flagship brand Pao de Acucar, said first-quarter net profit dropped to 40.6m reais (US$14.0m) from 55.8m reais a year earlier, reported Reuters.

Net financial costs jumped five-fold to 65.3m reais, while operational costs grew 26% to 532.7m reais due to recent acquisitions.

The company, which is 24% owned by French retail group Casino, said earnings before interest, tax, depreciation and amortisation grew to 209.5m reais in the first quarter, compared to 177m reais in the year-ago period.

The company’s revenue rose 22% year-on-year to 2.6bn reais, boosted by new stores and strong sales growth at its hypermarkets and cut price stores.