Yesterday, Natura & Co released its financial report of Q2, 2025. In Q2-25, Natura &Co reported net revenue of BRL 5.7 billion ($1.04 billion), down 1.7% YoY in Brazilian reais but up 5.5% in constant currency (+2.0% excluding Argentina). This was driven by strong double-digit growth from Natura Brazil (+10.3%) and solid gains from the Natura brand in Hispanic markets (+17.8% in CC), offset by weak performance from Avon Brazil (-12.9%) and anticipated volatility in Avon and Home & Style in Hispanic markets due to the Wave 2 integration in Mexico and preparations in Argentina.
Recurring EBITDA rose 4.5% YoY to BRL 796 million, with a margin of 14.0% (+80 bps). Natura &Co Latam posted a 14.7% recurring EBITDA margin, supported by gross margin gains in more mature Wave 2 markets, partly offset by G&A deleverage in Hispanic markets and higher investments in innovation and systems. Holding-level corporate expenses dropped 47% YoY to BRL 44 million, reflecting final steps in simplifying the corporate structure ahead of the July 1, 2025, merger with Natura Cosméticos.
Natura confirmed it has reclassified Avon International—which encompasses Avon operations outside Latin America—as an asset “held for sale”, reflecting ongoing efforts to divest the lower-margin business. In the first quarter, the unit accounted for about 20% of Natura’s total revenue but underperformed compared to the company’s Latin American operations. Avon businesses in the Dominican Republic and Central America were also included in the reclassification.
The company swung to a net profit of BRL 195 million ($35.8 million) from a net loss of BRL 859 million a year earlier, which had been impacted by a BRL 725 million one-off write-off. Discontinued operations — including Avon International, now classified as “held for sale” — totaled BRL -250 million, resulting in BRL 445 million in net income from continuing operations. Underlying net income reached BRL 598 million.
In Brazil, the company’s largest market, Natura delivered a robust 10.3% year-on-year revenue increase, supported by a richer product mix, price adjustments, and stable sales volumes, even amid a slight contraction in its consultant base (-3.2% YoY). The brand outperformed the beauty market during the quarter, although a marked slowdown in both the economy and the beauty sector was observed in June. Retail expansion remained a key growth lever, with the network reaching 152 own stores (+31 YoY) and 870 franchise stores (+72 YoY). Digital channels continued to accelerate, with online and social commerce sales up 39.8% YoY, driven by higher traffic and engagement through initiatives such as live streaming sales. Given Natura Brazil’s above-market growth in the first half of the year, market share gains are expected for the full year.
In the Hispanic markets, Natura posted a 17.8% revenue increase in constant currency, or low single-digit growth excluding Argentina. The slower pace compared with Q1-25’s mid-teens growth reflected the anticipated impact of Wave 2 integration in Mexico during the quarter, as well as preparations in Argentina for its July roll-out. While Argentina still registered positive growth, momentum was dampened by pre-integration adjustments.
Performance at Avon remained under pressure across Latin America. In Brazil, beauty category revenues fell 12.9% YoY, matching the decline seen in Q1-25, as the brand continued to face a lower number of new SKU launches. Investments in innovation are ongoing, with benefits expected to materialize in subsequent quarters. In the Hispanic markets, Avon beauty revenues dropped 13.6% YoY, and by 20.5% YoY when excluding Argentina. The downturn reflected the short-term disruption from the Wave 2 roll-out in Mexico and a steep decline in Argentina, where Avon transitioned to an exclusively digital brochure format ahead of integration, ending the distribution of physical catalogues — a shift already implemented by Natura in the past.
