Natura & Co Q2 sales hit by 'challenging environment'
Natura & Co, owner of Aesop and The Body Shop, has released its financial results for the second quarter, revealing a 0.4% increase in revenue at constant currency to £1.3 billion (R$8.7 billion).
Aesop net revenue increased 24.5% to £94.8 million (R$594.2 million), largely due to improved store productivity and a continued new store rollout in new cities including Cambridge and Madrid.
Avon net revenue was down 11.4% to £255 million (R$1.6 billion), mainly impacted by the war in Ukraine, low consumer confidence, eroding household purchasing power in Europe and fewer representatives in Europe.
The Body Shop net revenue decreased 11.8% to £145 million (R$909.4 million), affected by post-lockdown channel rebalancing, as the decrease in sales at The Body Shop At Home and e-commerce outpaced the progressive retail recovery. However, store revenues were up compared to last year and improved against to Q1 2022.
Digitally-enabled sales represented 49.5% of total sales and were above pre-pandemic levels at all business units despite a channel rebalancing as retail reopened, with continued growth at Natura and Avon.
Adjusted EBITDA at Natura & Co totalled at £110.9 million (R$694.9 million), down 14.3% against Q2 2021.
The group also reported a net loss of £122.3 million (R$766.7 million), driven by lower EBITDA and higher interest expense this quarter.
Fabio Barbosa, Group CEO of Natura &Co, said: "Though we expect our businesses' revenues to trend better in the second half of the year, we believe the challenges in the macro environment will persist and our margins will remain pressured in the short term. In this context, our clear and immediate priority is to focus on margins and operational cash-flow, and the teams at all our brands and businesses are mobilised and incentivised on those clear goals."