#Brazil #São Paulo #Avon #Natura

Natura's Performance in Q1 2026

Natura, a leading beauty multinational from Brazil, has reported its financial results for the first quarter of 2026. Despite facing revenue pressures in its major markets, Brazil and Argentina, the company achieved notable growth in other Latin American countries. The latest figures reveal that Natura generated R$ 4.7 billion in net revenue, with an EBITDA of R$ 346 million and a margin of 7.3%. However, a slowdown in market activity and challenging macroeconomic conditions significantly impacted results in Brazil.

In Brazil, the ongoing macroeconomic slowdown coupled with a drop in consultant headcount contributed to a challenging environment for Natura. Nonetheless, the company managed to gain market share during this quarter, driven by increased sell-out growth, which refers to sales directly to end consumers. The gradual recovery of the relationship selling channel, which relies on beauty consultants, also showed a positive trend, with a sequential rise in the number of consultants engaged.

Importantly, digital sales in Brazil soared by 23.6% year-on-year, bolstered by higher platform traffic and innovative marketing strategies, including live commerce. Furthermore, retail revenue increased by 14.3% year-on-year, underscoring the brand's resilience amid the downturn.

Excluding Argentina, the overall performance in Hispanic markets remained robust. Positive contributions came particularly from countries where the integration with Avon, completed in the first half of 2025, has matured. In Mexico, the brand successfully recovered from previous challenges, marking a bright spot in Natura's Q1 results.

The initiation of the Avon relaunch in March 2026 also played a crucial role in Natura's strategy, introducing new products and positioning aimed at revitalizing the brand. Although it remains in early development stages, initial sales have surpassed expectations, reflecting a promising outlook for future growth.

Despite these growth prospects, Natura’s profitability was weighed down by non-recurring costs associated with its new operating model, which aims to streamline business processes for improved efficiency. This transition came with substantial costs, amounting to R$ 330 million, temporarily affecting cash flow, which registered at R$ -315 million during this period.

CEO João Paulo Ferreira emphasized the company’s commitment to sustaining revenue growth and enhancing profitability as key priorities moving forward. The leadership remains optimistic about achieving its commitments for 2026, which focus on improving margins and solidifying cash generation with a disciplined capital allocation strategy.

From a social and environmental perspective, Natura has received commendable recognition as one of the World's Most Ethical Companies by the Ethisphere Institute, marking its efforts to integrate ethical standards within its business practices. Domestically, it has risen to 2nd place in B3's Corporate Sustainability Index, highlighting its commitment to corporate sustainability.

Founded in 1969, Natura continues to position itself as a pioneering force in the beauty and personal care sector in Brazil and Latin America. With a history of working closely with Amazonian communities and employing sustainable practices, the company is not only committed to profitability but also to preserving the rich biodiversity of Brazil.

In conclusion, while Natura faces hurdles in Brazil and Argentina, its diverse market strategies and strong performance in other Latin American regions demonstrate its resilience and potential for recovery and growth in the beauty industry.