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 earlier.
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 million reais.