Natura Trims Sales but Slashes Losses by Fourfold Through September

Natura is on the road to recovery. The Brazilian cosmetics giant closed the first nine months of the year with a new drop in sales, but having significantly reduced its losses in the period. The group, which owns Avon and Natura, and previously also The Body Shop, is currently immersed in a process of restructuring its portfolio and workforce to cut costs.

According to information published by Natura, the group closed the period with a turnover of 16,024 million Brazilian reais ($3 billion), 1.9% less than a year ago. The company’s gross profit, meanwhile, stood at 10,738 million reais ($2 billion), another 1% lower than a year ago.

Despite the fall in sales, the Brazilian giant also reduced its losses by four times in the first nine months of the current financial year. Whereas last year Natura accumulated losses of 8,491 million reais ($1.59 billion), the figure has narrowed to 1,881 million reais ($353.3 million).

Natura has suffered in the third quarter in its most important markets

As part of its strategy to reduce costs, Natura has been immersed since the beginning of last year in a move to spin off the Avon business outside Latin America. “Natura’s simplification process is finally nearing completion, with the announcement of a binding agreement to sell Avon International and the end of the divestment of Avon Central America and the Dominican Republic,“ the company explained. In mid-2024, in fact, part of this plan also involved the sale of The Body Shop.

By business lines, the group’s eponymous brand increased sales by 5.4% through September, to 12,329 million reais ($2.31 billion). The giant’s turnover through Avon, however, contracted by 17.6% to 2,761 million reais ($581million).

The group’s performance has been different in its two current markets. In Brazil, Natura posted a turnover of 9,650 million reais ($1.8 billion), 1.8% more than in the first nine months of the previous year. In the rest of Latin America, the giant’s turnover fell by 7.1% to 6,375 million reais ($1.19 billion).

In the third quarter alone, however, Natura’s sales fell steadily both in Brazil and in the rest of Latin America. Specifically, at the end of the last three months, the Brazilian group’s sales in its local market contracted by 3.7% year-on-year, together with the 13.1% drop in the other Latin American markets.

“Despite the progress in our structure, the quarterly evolution has been clearly unsatisfactory,“ explains the company, which attributes the drop to a slowdown in beauty consumption in Brazil. This context in the Brazilian market has coincided with “operational disturbances in Argentina”, which have overshadowed the recovery of the Mexican market, adds Natura. “Together, these three key markets, which account for approximately 85% of our revenues, caused a double-digit decline in our turnover,“ the group concludes.