Today (May 14th), Natura & Co, the parent company of Avon, a Brazilian beauty giant, released its financial report for the first quarter of 2024. The report indicates that Natura & Co’s consolidated net revenue for the first quarter amounted to 6.1 billion Brazilian reais, representing a decrease of 5.7% year-on-year in Brazilian reais. The gross profit was 3.978 billion reais, showing a decline of 4.3% year-on-year in Brazilian reais.
It is noteworthy that Natura & Co currently has two segments, Avon International and Natura & Co LATAM, both experiencing varying degrees of decline in the first quarter. Natura & Co LATAM, in Brazilian reais, saw a decrease of 3.3% year-on-year, with a net revenue of 4.7046 billion reais. Avon International, in Brazilian reais, experienced a decline of 13.1% year-on-year, with a net revenue of 1.397 billion reais. Natura & Co stated that despite efforts to improve productivity and streamline operations, Avon International still faces obstacles in representative activity and promotional execution.
In Avon Brazil, revenue within the Beauty category declined by 11.3% year-on-year in the first quarter of 2024. The decline in channels continues to affect revenue performance, but the improvement in productivity partially offsets the decline. Some planned SKU reductions also contributed to the year-on-year revenue decrease, but with a richer product mix, the profit margin expanded year-on-year. Additionally, a slight increase in marketing investments and some product innovations (such as the Power Stay series) contributed to the growth of Avon’s brand equity in the region.
In Avon Hispanic Latam, revenue decreased by 11.8% year-on-year, and by 24.1% year-on-year excluding Argentina, mainly due to the impact of the second wave of product launches in the region. Despite improvements in operational key performance indicators and significant year-on-year profitability expansion, sales performance remained weak due to planned reductions in consultants and SKUs.
Fábio Barbosa, CEO of Natura & Co, stated that in Brazil, Avon still faces adverse factors affecting the top line, but monthly trends are improving, and Avon’s sales are expected to stabilize in the second half of the year. Profit margins in Peru and Colombia have significantly expanded thanks to the implementation of the second wave of integration plans in Latin America.
Recently, it has been reported that Natura & Co has approved a plan to delist its American Depositary Shares (ADS) from the New York Stock Exchange while maintaining its primary listing of ordinary shares on the São Paulo B3 Stock Exchange. Additionally, insiders have revealed that Natura & Co is exploring the sale of most of its international business under the Avon brand.
