The shares declined 8.6 percent to 7.68 reais at the close of Sao Paulo trading, the lowest since March 2009. Hypermarcas has dropped 66 percent this year, the worst performance on the benchmark Bovespa index.
Hypermarcas cut its forecast for full-year earnings before interest, taxes, depreciation and amortization to 700 million reais ($400 million), citing lower inventory levels among clients and the global economic slowdown, according to a statement released today. In August, the company reduced its 2011 Ebitda guidance to 900 million reais from more than 1 billion reais.
“The impact of inventory levels in the company’s results this quarter was bigger than expected, even by the company,” Caue Pinheiro, an analyst at brokerage SLW Corretora, said today in a telephone interview.
Hypermarcas said customers’ inventory levels are falling because of a new commercial policy it implemented this year aims to balance sales to direct buyers, such as wholesalers and distributors, and those to final clients.
The company’s comparable sales, which include results of companies acquired by Hypermarcas as if they had been consolidated in January 2010, fell 12 percent in the third quarter. Net sales rose 10 percent to 908 million reais.
Retail sales in Latin America’s biggest economy fell 0.4 percent in August, the biggest drop since March 2010, as consumers pared back spending because of high inflation and economic turmoil in Europe and the U.S. Consumer prices rose 7.12 percent in the 12 months through mid-October.
The company last month agreed to sell some assets as it seeks to concentrate in pharmaceutical and personal hygiene products, where net sales expanded 21.5 percent and 4.8 percent in the third quarter from a year ago. Hypermarcas is also looking for buyers for Etti, a food brand, and Assolan, a cleaning products brand. Net sales in these segments dropped 12 percent last quarter, the company said.
Hypermarcas reported a loss of 190.5 million reais in the quarter, compared with net income of 78 million reais a year earlier, the Sao Paulo-based company said in a statement on its website. The average estimate of eight analysts surveyed by Bloomberg was for a net loss excluding some items of 22.3 million reais.
Brazil’s real lost 17 percent in the third quarter, the worst performance among 16 major currencies tracked by Bloomberg. At the end of the quarter, 24 percent of the company’s debt was exposed to currency fluctuations, Hypermarcas said.
“Because of the size of the quarterly miss and the very low guidance for 2012, on top of the sale of assets, we will review our estimates and target price,” Juliana Rozenbaum and Francine Martins, analysts at Banco Itau BBA SA, wrote in a report to clients. “Given the company’s poor credibility with investors and the delayed results of the new sales strategy, plus the size of downward revision to consensus estimates, we expect shares to continue to feel pressure.” The analysts have a “market perform” recommendation on the stock.
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