The growth pace of the sales channel in 2005 has been faster than that of last few years. At the end of 1H05, on a consolidated basis, the total number of consultants reached 483.9 thousand, up 21.1% Y-o-Y.
Cost Of Sales The cost of sales declined in relation to net revenues, from 34.1% in 2Q04 to 31.3% in 2Q05.
The 2.8 points decrease in relation to net revenues is primarily due to lower promotional efforts and better management of seasonal products margins (Mother's Day and Valentines' Day) in 2Q05 over 2Q04.
Other factors that have also contributed to reduce costs, although in a lesser degree, were: (i) tax credit rights (PIS and Cofins) on productive purchases incurring in the three months of 2Q05, but only in May and June of 2Q04; and (ii) scale gains.
Selling expenses in relation to net revenues increased from 29.9% in 2Q04 to 31.4% in 2Q05. This increase was primarily due to two main reasons: (i) growth of expenses related to the logistical process of collecting and distributing orders resulting from the inadequacy of these processes vis à vis the increase in operating volume in the last few years (the company is reviewing and redesigning these processes); and (ii) stronger investment in the marketing program.
Administrative expenses in relation to net revenues also posted an increase, from 13.5% in 2Q04 to 15.2% in 2Q05. The main contributors for this increase were: (i) intensified spending on the innovation process, in line with the company's strategy of attaining at least 3% of net revenues; (ii) international expansion (Mexico and France); and (iii) small increase in the provisions for contingencies in 2Q05, compared to reversal of contingencies in 2Q04.
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-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
