Natura & Co posts loss as Q4 revenue drops across businesses
Natura & Co has reported a net loss of £139 million (BRL890.4 million) for the fourth quarter, with lower revenues across Aesop, Avon and The Body Shop.
Consolidated net revenue was £1.6 billion (BRL10.39 billion), increasing 3% in constant currency but down 10.8% in BRL.
Aesop's net revenue increased 18.2% in constant currency to £138 million (BRL879.6 million), but was down 2.1% in BRL. All regions delivered double-digit growth. Retail and wholesale reported growth, partially offset by a "softer" e-commerce performance reflecting post-pandemic normalisation of consumer behaviour.
The Body Shop's net revenue decreased 8.4% in constant currency and 20.6% in BRL to £235 million (BRL1.5 billion). Combined sales of core business distribution channels (stores, e-commerce and franchise) showed a low single digit decline in constant currency, but improved compared to the third quarter when sales dropped high single digits.
Avon International, which includes all markets except Latin America, saw net revenue drop 9.9% in constant currency to £313 million. Operations in Russia and Ukraine, as well as one-off supply chain issues, had an "unfavourable impact" on sales.
Adjusted EBITDA dropped 29% to £156 million, whilst adjusted EBITDA margin dropped 280 bps to 10.5%.
Fabio Barbosa, CEO of Natura & Co, said: “We started 2022 navigating in a challenging macro environment, which worsened with the war in Ukraine, and uncertainty surrounding the performance of a few business units after a post-pandemic change in consumer behaviour. In this environment, we decided in mid-year to reassess the group’s growth model to enter a new stabilisation cycle.
"Looking forward, we are confident that the actions we are taking will position Natura & Co to focus not only on profitability and cash, but also to return to growth. Whilst we expect 2023 to be another challenging year, our focus on cash generation and improving the company’s capital structure will allow us to invest in our priorities, building the path to unlock significant value."