Natura fell 4 percent to 33.20 reais in Sao Paulo trading, while the Bovespa rallied 3.7 percent. Shares have fallen 30 percent this year, compared with the benchmark’s 14 percent decline.
Third-quarter sales rose to 1.38 billion reais ($802 million) from 1.28 billion reais a year earlier, the company said in a regulatory filing yesterday. The 7.8 percent growth is the slowest since 2007 for the third quarter. Natura said increased competition, slowing economic growth in Brazil and “internal factors” affected sales.
“There were several red flags in these results,” Raymond James analysts Daniela Bretthauer and Danilo Liborio wrote in a note to clients today, calling the latest quarterly performance “lackluster.” They maintained a “market perform” recommendation on the stock.
“This year, Natura’s growth in Brazil is below last year’s and our expectations,” the company said in its earnings statement.
Net income rose 5.2 percent to 201.6 million reais from 191.7 million reais a year earlier, the Cajamar-based company said. Profit exceeded the 195.9 million-real average estimate of nine analysts surveyed by Bloomberg.
Brazil’s economy is expected to grow 3.3 percent this year after expanding 7.5 percent in 2010, according to a central bank survey of economists published Oct. 24. Retail sales fell 0.4 percent in August, the biggest drop since March 2010, while the economic activity index shrank in August by the most in three years.
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