Natura's Corporate Simplification and Strategic Movements Amid Challenges in Latin America
In its third quarter results released on November 10, 2025, Natura (B3 NATU3) shared insights on its ongoing corporate strategies, revealing both significant changes and challenges in Latin America. The company reported consolidated net revenue of R$ 5.194 billion, which reflects a decline of 3.8% year-on-year when adjusted for constant currency. These results stem from a slowdown within the Brazilian beauty market coupled with temporary operational disruptions arising from Natura's integration with Avon. This integration, particularly impactful in regions like Argentina and Mexico, is a vital part of Natura's strategy to solidify its position within the competitive landscape.
The company noted that while performance in Mexico is on a path to recovery, Brazil has experienced relatively stable revenue within the Natura brand. Notably, in Hispanic America, growth was evident across all countries except Argentina, where stability is expected going forward. The revenue decline can largely be attributed to consumption challenges within Brazil, compounded by the operational integration hurdles in Argentina and Mexico — the three markets that account for approximately 85% of Natura's business.
The operational hurdles led to a decreased dilution of expenses, which resulted in a notable drop in the recurring EBITDA margin for the Latin America region, now at 11.7%, reflecting a 360-basis-point dip. However, the gross margin remains robust across the market, providing a foundation for future profitability.
João Paulo Ferreira, CEO of Natura, expressed optimism regarding upcoming quarters, affirming that efficiency improvements and cost containment measures already in action will aid in enhancing profitability. He remarked that Mexico had shown stabilization by quarter's end, with Argentina likewise starting to bounce back. Ferreira's focus on expanding leadership within Latin America and fostering growth in Hispanic markets is a key aspect of Natura’s overarching strategic vision.
Natura's omnichannel strategy is evolving, with both digital and physical retail channels continuing strong growth trends, solidifying their importance as revenue drivers. The brick-and-mortar expansion has been impressive, with 89 new stores launched in Brazil and 32 across Hispanic America during this quarter.
Another exciting development is the significant penetration of Emana Pay — Natura's financial technology platform — which now reaches 36% of the consultant base, showcasing a remarkable 50% growth compared to the previous year's figures. This fintech ecosystem significantly enhances credit access, acting as a crucial lever for channel productivity.
This quarter also marked substantial strides in Natura's corporate simplification efforts. In line with strategic goals, the integration with Avon in Latin America was completed, alongside finalization of operations in Central America and the Dominican Republic. Notably, an agreement has been reached to sell Avon International, excluding operations in Russia, with completion expected in the first quarter of 2026. Although this strategic divestiture reflects in the balance sheet as a non-recurring write-off of R$ 1.7 billion, it carries no operational impact. Importantly, the Avon brand will continue under the management of Natura in Latin America.
In an effort to enhance transparency regarding sustainability and climate-related financial disclosures, Natura announced its intention to adopt the IFRS S1 and IFRS S2 standards starting in fiscal year 2025, positioning itself as a frontrunner in Brazil by proactively meeting upcoming mandatory requirements. This month, Natura also participated in COP-30 in Belém, focusing on strategies to promote climate and socio-environmental solutions in the Amazon — where the brand has operated for over 25 years. CEO Ferreira reiterated that sustainability and the commitment to improve profit margins remain at the forefront of the company’s initiatives as it navigates through these complex market conditions, pushing towards a resilient and optimistic future for Natura and its stakeholders.
In closing, Natura's Q3 2025 earnings conference call is scheduled for November 11, 2025, showcasing the operational results and strategies moving forward into a rapidly evolving marketplace.
The company noted that while performance in Mexico is on a path to recovery, Brazil has experienced relatively stable revenue within the Natura brand. Notably, in Hispanic America, growth was evident across all countries except Argentina, where stability is expected going forward. The revenue decline can largely be attributed to consumption challenges within Brazil, compounded by the operational integration hurdles in Argentina and Mexico — the three markets that account for approximately 85% of Natura's business.
The operational hurdles led to a decreased dilution of expenses, which resulted in a notable drop in the recurring EBITDA margin for the Latin America region, now at 11.7%, reflecting a 360-basis-point dip. However, the gross margin remains robust across the market, providing a foundation for future profitability.
João Paulo Ferreira, CEO of Natura, expressed optimism regarding upcoming quarters, affirming that efficiency improvements and cost containment measures already in action will aid in enhancing profitability. He remarked that Mexico had shown stabilization by quarter's end, with Argentina likewise starting to bounce back. Ferreira's focus on expanding leadership within Latin America and fostering growth in Hispanic markets is a key aspect of Natura’s overarching strategic vision.
Natura's omnichannel strategy is evolving, with both digital and physical retail channels continuing strong growth trends, solidifying their importance as revenue drivers. The brick-and-mortar expansion has been impressive, with 89 new stores launched in Brazil and 32 across Hispanic America during this quarter.
Another exciting development is the significant penetration of Emana Pay — Natura's financial technology platform — which now reaches 36% of the consultant base, showcasing a remarkable 50% growth compared to the previous year's figures. This fintech ecosystem significantly enhances credit access, acting as a crucial lever for channel productivity.
This quarter also marked substantial strides in Natura's corporate simplification efforts. In line with strategic goals, the integration with Avon in Latin America was completed, alongside finalization of operations in Central America and the Dominican Republic. Notably, an agreement has been reached to sell Avon International, excluding operations in Russia, with completion expected in the first quarter of 2026. Although this strategic divestiture reflects in the balance sheet as a non-recurring write-off of R$ 1.7 billion, it carries no operational impact. Importantly, the Avon brand will continue under the management of Natura in Latin America.
In an effort to enhance transparency regarding sustainability and climate-related financial disclosures, Natura announced its intention to adopt the IFRS S1 and IFRS S2 standards starting in fiscal year 2025, positioning itself as a frontrunner in Brazil by proactively meeting upcoming mandatory requirements. This month, Natura also participated in COP-30 in Belém, focusing on strategies to promote climate and socio-environmental solutions in the Amazon — where the brand has operated for over 25 years. CEO Ferreira reiterated that sustainability and the commitment to improve profit margins remain at the forefront of the company’s initiatives as it navigates through these complex market conditions, pushing towards a resilient and optimistic future for Natura and its stakeholders.
In closing, Natura's Q3 2025 earnings conference call is scheduled for November 11, 2025, showcasing the operational results and strategies moving forward into a rapidly evolving marketplace.
Topics Consumer Products & Retail）
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