For the 2024 Q1, the Brazilian beauty giant Natura’s losses increased due to declining sales at Avon. The net loss expanded by over 40% to BRL 934.9 million in the first quarter, as net sales dropped by 5.7% to BRL 6.1 billion. Avon International sales decreased by 13.1% to BRL 1.3 billion (£214 million), or 4.7% at constant currency.
The company is also exploring other distribution channels, including retailers. Avon products are already available in the UK through Superdrug, Italy through Naima stores, and in Turkey through representatives’ retail franchise stores. The company mentioned that it is still considering the possibility of separating Avon and will provide updates to the market once these studies are completed.
Meanwhile, the performance in Latin America showed improvement, with Natura &Co Latam’s Q1 revenues up 3.1% in constant currency. Natura Brazil stood out with an 11.3% increase in Q1 revenues.
However, Avon remained a weak point in the region, offsetting Natura Brazil’s strong performance. Avon Latam reported declining revenues, with an 11.3% decrease in Brazil and an 11.8% drop in Hispanic Latin America.
In February, Natura &Co announced that its board had authorized management to explore separating its Avon brand outside Latin America, potentially creating a new listed company to manage the business outside the region.
The specifics of the split are still under evaluation, but this would be the latest in a series of actions Natura has taken over the past year to simplify its structure, including the divestment of its Aesop and The Body Shop brands.
Natura stated in a securities filing that the proposed agreement would divide the current company into two publicly traded entities. Under the arrangement, Natura &Co Latam would manage the Natura brand globally and the Avon brand solely within Latin America. Avon, on the other hand, would oversee its brand outside Latin America while collaborating with Natura &Co Latam within the region.
