Natura &Co reported revenue growth in the first quarter of 2020, the first to include Avon Products, Inc.
Natura &Co’s consolidated net revenue reached R$7.5 billion, up 1.9 percent versus the same quarter last year. According to the company, growth was driven by a strong increase in sales by the Natura brand in Brazil and in Hispanic Latin America and continued double-digit growth at Aesop.
Amid the Covid-19 pandemic, digital social selling and e-commerce sales grew exponentially as consumers adapted to social distancing and lockdown measures by mid-March. Group e-commerce sales grew by nearly 250 percent in recent weeks vs. the same period last year. During the quarter, e-commerce grew 150 percent at Natura and Avon combined, 300 percent at the Body Shop and over 500 percent at Aesop.
The Natura brand’s net revenue increased by 14.9 percent, supported by strong sales growth at Natura Brazil (+9.8%) and Hispanic Latam (+25.8%,) despite Covid-19 impacts toward the end of the quarter. The Avon brand’s net revenue declined 7.1 percent in BRL on a reduction in representatives across all markets in Latin America and Covid-19 impact later in the quarter, partially offset by an improved price/mix combination.
Avon International, which comprises Avon’s activities in 50 markets throughout Europe, Asia, Africa and the Middle East, saw its Q1 net revenue decrease by 2.4% in BRL. The decrease was caused by a reduction in representatives and a Covid-19 impact, partially offset by an improved price/mix combination across most markets. Representatives increased adoption of digital assets from a low single digit in 2019 to over 37 percent in recent weeks. Sales via the digital brochure have increased nearly 85 percent since January 1.
With the addition of Avon, Natura &Co becomes the leader in the Latin American CFT market with 11.8 percent market share (source: Euromonitor). Natura &Co has accelerated Avon’s integration and is raising its target synergies by $100 million to between $300 million and $400 million, including new top-line synergies to be achieved over four years at Natura &Co Latam.
To read the complete Natura &Co Q1 2020 report, click here.