Natura & Co has reported a resilient Q1 2023 with a strong performance from its Latin American business compensating for less than stellar sales figures from The Body Shop and Avon International.
The Brazilian conglomerate saw consolidated net revenue of Brazilian real R$8bn, up 3.4% at constant currency.
Net income for the quarter amounted to R$652.4m.
Natura & Co Latam sales were up 9% in constant currency, driven by double-digit growth of the Natura brand (+25.1%).
This was somewhat mitigated by a 9.8% drop by its Avon brand in the region.
Avon International’s net revenue was also down 7.5% at constant currency, which Natura & Co said continued to reflect the situation in Ukraine.
The Body Shop, meanwhile, saw net revenue drop 9.4% at constant currency, reportedly due to a tough macroenvironment in the UK and Western Europe, which hit retail sales.
Natura & Co said that under newly announced CEO Ian Bickley, The Body Shop’s management would work to refine its current business plan while prioritising profitability and cash conversion recovery.
Aesop, which is in the process of being sold to L’Oréal, with completion expected in Q3, recorded double-digit growth in constant currency, up 16.8%, boosted by especially strong fragrance sales.
The brand is now classified by Natura & Co as ‘discontinued operations’.
“Excluding Aesop, Q1 2023 showed a strong profitability improvement, mainly driven by gross margin expansion across all business units and continuous cost control, that were partially offset by sales deleverage at The Body Shop, Avon Latam and, to a lesser extent, Avon International,” said Fabio Barbosa, Group CEO of Natura & Co.
“While 2023 continues to shape up as another challenging year, our strategic priorities are clear and the first results give us confidence that we are on the right track.”
Read more:
- L'Oréal acquires Aesop for $2.5 billion
- The Body Shop CEO David Boynton to step down
- Natura's sales plummet 11% following The Body Shop job cuts
