Natura &Co Latam rebounds from last quarter and achieves 15% profitability in Q1-25

Rhea-AI Summary

Natura &Co (NUACF) reported strong Q1-25 results, with Latin American revenue growing 12.2% year-over-year in constant currency to R$5.3 billion. The company achieved a recurring EBITDA margin of 15% (13.9% adjusted), expanding 50 bps year-over-year and significantly improving from 9.6% last quarter. Gross margin reached 67.1% in Latin America, driven by successful integration of Natura and Avon brands. The Natura brand showed exceptional performance with 8.2% revenue growth in Brazil and 38.4% in Hispanic countries. Digital sales increased by 34.7%, while retail expansion continued with 149 owned stores and 869 franchises. The company's net loss decreased by 84% to R$151 million compared to Q1-24. Notable ESG achievements include the Celaya plant becoming fully solar-powered and recognition as one of the World's Most Ethical Companies.

Positive

• Recurring EBITDA margin improved to 15%, up 50 bps YoY and significantly higher than last quarter's 9.6%
• Revenue growth of 12.2% in Latin America (constant currency)
• Strong gross margin of 67.1% in Latin America
• Digital sales increased 34.7% YoY
• Net loss decreased 84% YoY to R$151 million
• Retail expansion with 34 new owned stores and 88 new franchises YoY

Negative

• Company still operating at a net loss of R$151 million
• Transformation costs expected to continue through 2025
• Wave 2 integration in Mexico and Argentina still pending completion

• In the period, Natura &Co Latam recorded a recurring EBITDA margin of 15% (13.9% adjusted for non-operating impacts), expanding +50 bps year-on-year and exceeding the 9.6% result reported last quarter.
• Gross margin reached 67.1% in Latin America, driven by solid year-on-year expansion in the countries where the Natura and Avon brands have already been integrated (Wave 2)
• Net revenue of the Latin American business unit grew 12.2% in CC compared to Q1-24, sustained by the strong performance of the Natura brand

SÃO PAULO, May 12, 2025 /PRNewswire/ -- Natura &Co (B3: NTCO3), the leader in beauty and personal care in Latin America¹, ended the first quarter of 2025 with revenues of R$5.3 billion in the region, up 12.2% compared to Q1-24 in constant currency (CC) (+4.1% excluding Argentina). Total revenue was R$6.7 billion, including R$1.4 billion from Avon Internacional².

In the Latin American operation, the recurring EBITDA margin reached 15% (13.9% adjusted for non-operational impacts), exceeding the result of 9.6% reported in the last quarter and growing +50 bps year-on-year. The profitability improvement reflects the expansion in gross margin, which reached 67.1% in Latin America, driven by expansion in the countries where the integration of the Natura and Avon businesses has already been implemented, the so-called Wave 2. Greater efficiency in the management of general and administrative expenses also contributed to the evolution of the margin.

The Q1-25 results were driven by the Natura brand performance, which recorded a revenue increase of 8.2% in Brazil and 38.4% in the Hispanic countries (mid-teens excluding Argentina). In Brazil, robust retail growth was driven by strong same-store sales performance and a consistent pace of new store openings, reaching 149 owned stores (+34 compared to Q1-24) and 869 franchises (+88 compared to Q1-24). In digital, sales increased by 34.7% year-on-year, with the brand's share of voice on social networks growing, leading the main platforms in the beauty category.

"Latin America's performance this quarter contributes to our ultimate goal of achieving year-on-year expansion of the recurring EBITDA margin to by the end of 2025. Efficiencies from Wave 2 will continue to be partially reinvested in marketing and other strategic fronts, with some volatility between quarters, but on a more balanced basis compared to previous years, given that investments are better spread over the periods. In addition, the implementation of Wave 2 in Mexico and Argentina is expected to be completed in 2025. As a result, the transformation cost cycle will end this year and should not exceed the total recorded in 2024," commented Natura's CEO, João Paulo Ferreira.

From an ESG perspective, one of the highlights of the period was that the Celaya plant in Mexico became the first Natura facility in Latin America to be fully powered by certified solar energy. The initiative is part of the company's decarbonization strategy and has already reduced carbon emissions by approximately 1,000 tons. The plant is expected to reduce its annual emissions by 83%, aligning efficiency gains with climate goals."As we move forward on the journey of simplifying our structure and focusing on operations in Latin America, our commitment to the ESG agenda remains unwavering, and it generates a competitive advantage to the business, reflected on continuous progress in our social and environmental goals," said the CEO.

This year, Natura was recognized for the 14th time as one of the World's Most Ethical Companies by the Ethisphere Institute. It also received, among other awards, the "Corporate Sustainability Bond of the Year" from Environmental Finance, highlighting its leadership in sustainable finance.

Natura &Co
Natura &Co's net loss in Q1-25 decreased by 84% compared to the same period in 2024, reaching R$151 million, against R$935 million in the previous year.

The company's simplification journey, which began three years ago, has taken an important step forward which reinforces its focus on Latin America. In March, the incorporation of Natura &Co Holding by Natura Cosméticos was announced, a proposal approved by shareholders on April 25.

The full results report and financial statements can be accessed at https://ri.naturaeco.com/en/.

Q1-25 Earnings Conference Call on 5/12 at 8:00 AM (New York time) / 1:00 PM (London time) at
https://tenmeetings.com.br/ten-events/#/webinar?evento=ConferenciadeResultados1T25-NATURA_262

About Natura &Co
Natura &Co is a purpose-driven group that brings together Natura and Avon brands, connecting with consumers through a network of 4.8 million Beauty Consultants and Representatives, over 1,000 stores, and more than 19,000 employees. The group operates through two business units: Natura &Co Latin America, which oversees the global management of Natura and Avon across Latin America, and Avon International, which leads the brand's operations in Asia, Europe, Oceania, and Africa.

¹ Source: Euromonitor International; umbrella brand Natura , Beauty and Personal Care 2025ed; retail value sales (RSP), 2024 data
² In 2024, Avon International was accounted for as discontinued operations until it was reconsolidated on December 4.

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SOURCE Natura &Co

FAQ

What was Natura &Co's (NUACF) EBITDA margin in Q1 2025?

Natura &Co achieved a recurring EBITDA margin of 15% (13.9% adjusted for non-operating impacts) in Q1 2025, representing a 50 basis points increase year-over-year.

How much did Natura &Co's revenue grow in Latin America during Q1 2025?

Natura &Co's Latin American revenue grew 12.2% in constant currency compared to Q1 2024, reaching R$5.3 billion.

What was Natura &Co's (NUACF) net loss in Q1 2025?

Natura &Co reported a net loss of R$151 million in Q1 2025, an 84% improvement from the R$935 million loss in Q1 2024.

How many retail stores does Natura operate in Brazil?

As of Q1 2025, Natura operates 149 owned stores and 869 franchises in Brazil, adding 34 owned stores and 88 franchises compared to Q1 2024.

What was Natura's digital sales growth in Q1 2025?

Natura's digital sales increased by 34.7% year-over-year in Q1 2025, with the brand leading in share of voice on social networks in the beauty category.