Natura Profit Beats Forecasts as Operational Upgrades Completed

Natura Cosmeticos SA, Latin America’s largest cosmetics company, posted second-quarter profit that beat analysts’ estimates as an upgrade of operational systems boosted sales.

Net income rose 14 percent to 215 million reais ($105.8 million) from 188 million reais a year earlier, the Cajamar, Brazil-based company said yesterday in a statement sent to the website of Brazil’s securities regulator. The result was above the 213 million reais average estimate for adjusted net income of six analysts compiled by Bloomberg.

Sales rose 16 percent to 1.61 billion reais, from 1.39 billion reais a year earlier. It was the second consecutive quarter of double-digit sales growth following three quarters of expansion of less than 10 percent.

During the replacement of operating systems in 2011, some disruptions caused weak sales growth, Bradesco BBI analysts Ricardo Boiati, Alan Cardoso and Pedro Bueno wrote in a report to clients before the earnings were released.

“Now that the operating problems have been fixed, Natura should be able to resume stronger top-line growth, with gradual acceleration in the coming quarters,” the analysts wrote.

The number of direct sellers grew 16 percent to 1.5 million, Natura said.

“We began to enjoy the benefits of the strategic investments made in logistics and information technology,” the company said in the earnings statement.

Natura rose 1.8 percent to 49.20 reais yesterday in Sao Paulo trading. The stock is up 36 percent since the beginning of the year, compared to a 7.3 percent drop in the Bovespa benchmark index.

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