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Natura Cosmeticos Falls as Bovespa Tumbles Most Since November

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Feb. 9 (Bloomberg) -- Natura Cosmeticos SA fell, halting a two-day rise, as the Bovespa index tumbled the most since November after Brazil’s budget-cut plan failed to quell concern that faster inflation will limit earnings.

Natura, Brazil’s biggest cosmetics maker, lost 2 percent to 41 reais in Sao Paulo trading. The stock climbed as much as 1.6 earlier today after Raymond James & Associates Inc. increased its profit forecast for the company, citing disappointing results at competitor Avon Products Inc. The Bovespa index fell 2.4 percent to 64,217.52.

Fourth-quarter earnings per share may rise to 50 centavos, 15 percent more than the brokerage forecast on Nov. 1, Daniela Bretthauer, the firm’s head of Brazil research, wrote in a note to clients today.

Natura’s international operations are set to benefit as sales outside Brazil may have risen 40 percent in the quarter from a year earlier to 144 million reais ($86.6 million), Bretthauer said. The Cajamar, Brazil-based company may also gain after Avon struggled last quarter, she said. Avon, the world’s largest door-to-door cosmetics merchant, yesterday reported fourth-quarter profit that missed analysts’ projections in part due to delays filling orders in Brazil.

“Natura’s execution remains strong, as it grew sales in its core market eight times faster than its closest competitor, Avon,” Bretthauer said.

The company is scheduled to issue results Feb. 23. Natura may report fourth-quarter earnings, excluding some items, of 51 centavos a share, according to the average estimate of four analysts surveyed by Bloomberg.

To contact the reporter on this story: Ney Hayashi in Sao Paulo at ncruz4@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulous@bloomberg.net

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