Natura, the Brazilian cosmetics company, is set to see a revenue decrease of between 9% to 10% year-on-year (YoY) following a difficult trading period in its home market among other elements.
This follows a tough Q1 for the Avon-owner, which signalled growing pressures in Brazil and Argentina as the company had a slow start to the year.
Now, Natura has shared how ongoing struggles in the Brazilian market were stronger than initially expected, alongside operational challenges and tax issues that have impacted revenue for the quarter.
“Severe” product unavailability due to changes to the company’s operational systems also had a strong impact on the decline in sales, compounded with a challenging macroeconomic environment which led to a fall in the relationship selling channel.
Additionally, the execution of a harmonised pricing policy across channels led to a short-term slowdown in online sales.
The information was released to shareholders and the market in a preliminary document ahead of the release of its Q2 2026 financial results.
Natura estimates consolidated net revenues to be between R$5.1bn and $5.2bn.
Despite this fall in revenue, growth in the EBITDA margin is expected due to “lower sequential severance expenses and efficiencies unlocked from the new operating model”, read a company statement.
To drive revenue growth, Natura’s management is implementing a number of initiatives, including supply chain reconfigurations and the resumption of an accelerated pace of store openings.
The full Q2 results are expected to be shared on 10 August.
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