#Brazil #São Paulo #Avon #Latin America #Natura

Natura's Progress: Q3 2025 Results

In its third quarter of 2025, Natura reported a consolidated net revenue of R$ 5.194 billion, reflecting a decrease of 3.8% year-on-year when adjusted for constant currency. This decline is primarily attributed to a general slowdown in the beauty market in Brazil and temporary operational challenges from the integration of Avon in Argentina and Mexico.

Highlights from Q3 2025

The company announced a significant agreement to sell Avon International, with completion expected in the first quarter of 2026, alongside the completion of business sales for Avon in Central America and the Dominican Republic. This move is a key step in Natura’s corporate simplification strategy aimed at streamlining operations and focusing on core markets in Latin America.

Despite the challenges, Natura emphasized continued improvement in profitability driven by operational efficiencies and cost containment measures. The company's CEO, João Paulo Ferreira, expressed optimism about the future, pointing out that while the recurring EBITDA margin in Latin America decreased to 11.7%, both Mexico and the overall Hispanic markets are beginning to show signs of recovery.

Regional Performance Insights

In Brazil, Natura's performance remained stable year-over-year, even as market consumption faced constraints. The brand registered solid sales figures across various Hispanic countries, aside from Argentina, where a stable performance is projected for early 2026. The latest quarter showed recovery trends in Mexico, suggesting an upward trajectory moving forward.

Moreover, Natura's omnichannel strategy gains traction, with digital and retail channels both achieving notable growth. The brand expanded its retail presence by launching 89 new stores in Brazil and an additional 32 in Hispanic America during this quarter.

Financial Innovations

A highlight was the growth of Emana Pay, Natura’s fintech platform, which now serves 36% of its consultant base, a 50% increase from the same period last year. The financial ecosystem it offers significantly enhances credit access for consultants, amplifying productivity across channels.

Corporate Simplification Status

With the integration of Avon operations in Latin America now complete, Natura is nearing the end of its corporate simplification process. This includes finalizing the sale of Avon’s operations in the specified regions. The termination of the Avon International business is anticipated to yield a non-recurring, non-cash write-off of R$ 1.7 billion, although this has no impact on the daily operations of the company.

In line with Boa Vista, Natura is also adopting new IFRS standards starting fiscal year 2025, reinforcing its commitment to sustainability by enhancing transparency in climate-related disclosures. Their active participation in COP-30 in Belém is another testament to their dedication to socio-environmental solutions in the Amazon region, a field where they have been pioneering efforts for over 25 years.

Conclusion and Future Outlook

As Natura wraps up Q3 2025, the outlook remains cautiously optimistic. The company's focus on strengthening profitability amid fluctuating market conditions, alongside strategic alliances and corporate simplifications, positions it well for future growth. Stakeholders are encouraged to participate in the upcoming earnings conference call scheduled for November 11, 2025, to gain further insights into the company's ongoing strategies and performance forecasts.