SAO PAULO May 3 Brazilian drugstore chain
Hypermarcas posted a stronger profit than expected in
the first quarter as its cutback in marketing expenses and other
operations in the face of disappointing demand had no negative
impact on results.
Net income rose 151 percent from a year earlier to 102.3
million reais ($51 million), according to a Friday securities
filing, trouncing an average forecast of 66 million reais in a
Reuters survey of analysts.
Rising inflation has eaten into Brazilians' paychecks in
recent months, hurting consumer confidence and sapping demand
for the pharmaceuticals and disposable consumer goods such as
deodorant and sweeteners. Chief Executive Claudio Bergamo warned
last month that growth in the quarter was lower than expected.
But earnings before interest and taxes in continuing
operations were up 33 percent at 190.8 million in the first
quarter this year against last, and the company said "better
operating performance and no negative impact from discontinued
operations" had helped results.
The company's strong brands have so far allowed it to pass
prices on to customers, supporting its gross profit margin at
63.9 percent of revenue, compared to 62.2 percent a year
Hypermarcas pared back its sales budget by 4 percent in
order to protect operating profits. Adjusted earnings before
interest, taxes, depreciation and amortization, rose 18 percent
to 227.1 million reais, above analysts' estimates of about 168