Natura & Co Reported Net loss of $130 million in Q1
- Chaileedo
- May 9, 2023
- 3 min read
Natura & Co, the São Paulo-based beauty company, reported consolidated net revenue of BRL 8,021.4 million ($1.6 billion) in 2023 Q1, with an increase of 3.4% in constant currency and down 2.8 in BRL. The company reported net loss of BRL 652.4 million ($130 million) in Q1.
Natura & Co, the São Paulo-based beauty company, reported consolidated net revenue of BRL 8,021.4 million ($1.6 billion) in the first quarter of 2023. This represents an increase of 3.4% in constant currency, but a decrease of 2.8% in BRL. However, the company also reported a net loss of BRL 652.4 million ($130 million) during the same period.
Natura & Co said the growth in constant currency (CC) was driven primarily by the strong performance of Natura &Co Latam, which saw a 9.0% increase in CC, and Aesop, which saw a 16.8% increase in CC. However, this growth was partially offset by ongoing challenges at The Body Shop, which saw a decline of 9.4% in CC, and to a lesser extent, at Avon International, which saw a decline of 7.5% in CC (or 3.7% excluding Russia and Ukraine).
Excluding Aesop, Natura & Co's consolidated net revenue for the first quarter of 2023 was BRL 7.3 billion, which represents a 2.2% increase YoY in CC and a 3.8% decrease YoY in BRL.
Natura & Co's consolidated gross profit was BRL 5.4 billion ($1.08 million), which corresponds to a gross margin of 67.7%. The improvement was mainly driven by pricing and mix, which compensated for inflation and foreign exchange pressures that continued to affect the company.
While Natura & Co net loss in the first quarter of 2023 was BRL 652 million, which is broadly in line with the net loss reported for the same period last year.
In terms of business unit, Natura &Co Latam net revenue in Q1 increased by 9.0% to BRL 4,863.7 million ($ 970.89 million) in constant currency (CC) and by 2.4% in BRL. The growth was driven by solid double-digit growth in CC at the Natura brand. However, this growth was partially offset by a high-single digit CC sales decline at Avon Latam.
Avon International net revenue in Q1 declined by 7.5% to BRL 1,606.6 million ($ 320.71 million) YoY in constant currency (CC) and by 12.8% in BRL. However, the Beauty category (excluding Russia and Ukraine) saw positive growth, driven by the fragrance and color categories. On the other hand, the Fashion & Home category decreased by 21% in CC, which is attributed to the portfolio optimization strategy.
The Body Shop net revenue in Q1 declined by 9.4% to BRL 849.9 million ($ 169.64 million) in constant currency (CC) and by 16.5% in BRL. However, the combined sales of core business distribution channels, which include stores, e-commerce, and franchise, showed only a low-single digit decline in CC during the same period.
Aesop net revenue in Q1 increased by 16.8% to BRL 701.3 million ($ 139.99 million) in constant currency (CC) and by 9.2% in BRL. Despite a deteriorating macro environment, all regions delivered double-digit YoY growth during the same period.
On April 3rd, Natura & Co disclosed that it had entered into a binding agreement to sell Aesop to L’Oréal for an enterprise value of $2.525 billion. The closing of this transaction is expected to take place in the third quarter of 2023, and Aesop will be classified as discontinued activities until then.
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