SAO PAULO, Oct 21 (Reuters) - Brazilian cosmetics company Natura Cosmeticos SA reported a sharp drop in third-quarter net income on Wednesday due to weak demand, higher taxes and a provision to buy out its partners in Australian subsidiary Aesop.
Profit fell 39 percent from a year earlier to 132 million reais ($34 million), missing an average estimate of 190 million reais in a Reuters survey of analysts.
Net revenue in Brazil, which accounts for two thirds of sales, fell nearly 10 percent due to a severe economic recession crimping household demand and higher sales taxes from the government’s effort to cover a fiscal deficit.
Natura’s bottom line also suffered from the non-cash effects of its foreign currency hedge and a provision to buy the remaining 29 percent of Aesop, which together totaled 60 million reais.
Earnings before interest, taxes, depreciation and amortization slipped 6 percent to 400 million reais, slightly below an average forecast of 416 million reais.
$1 = 3.94 Brazilian reais Reporting by Juliana Schincariol; Writing by Brad Haynes; Editing by Diane Craft