Natura &Co’s third quarter financial report reveals a net income improvement of over $1 billion Reais on a year-to-date basis, but a slight sales decline in the third quarter. This decrease reflects a record-high comparable base, given the company’s 20% growth in 2020, and external challenges.
The company’s third quarter efforts continued its advances on key strategic initiatives to fuel future growth, including the implementation of Avon’s new commercial model and an acceleration in digital tools. For the first time in five years, Avon’s total sales showed a 10.7% growth in the first nine months of the year compared to the same period last year.
Natura &Co Group also announced the launch of a share repurchase plan of up to R$ 1.5 billion and is in the process of evaluating a switch to the NYSE while maintaining a dual listing with the Brazilian Depositary Receipts (BDRs).
“Despite a very tough comparable vs last year, when we grew over 20%, and some persistent external headwinds related to the global pandemic, Natura &Co continues to progress on its key initiatives, attesting to the underlying strength of our business,” said Roberto Marques, Executive Chairman and Group CEO. “We again outperformed the global Cosmetics, Toiletries and Fragrances market on a year-to-date basis and versus pre-pandemic levels, all our brands and businesses posted growth over nine months and the Group’s digitalization continued to advance. We also made major headway on the integration of Avon. With a further roll-out of Avon’s new commercial model, continued deployment of social selling tools at Natura, new conversions to The Body Shop’s new store concept and preparations for an entry onto the Chinese market at Aesop well underway, we have a number of initiatives to fuel growth in 2022 and beyond.”
Net revenue was up 14.4% (R$28.5 billion) over the first nine months of the year, with an adjusted EBITDA margin of 9.1%. Net income reached R$352.6 million, which reversed a loss from the same period last year of R$827.6 million.
Consolidated net revenue in the third quarter was down 4.2% to R$9.5 billion, which reflected a record-high comparable base.
Online sales and social selling accounted for 52% of the company’s total revenue.
Avon International’s net revenue decreased 14.3% in the third quarter, but was up 6.3% in the first nine months. Online sales for the company were also up 19%. Adjusted EBITDA margin was 3.9% in the third quarter.
Net revenue for The Body Shop was up 0.4% in the third quarter and 20.6% in the first nine months. Online and at-home channels remain twice as high as pre-pandemic levels. Third quarter EBITDA margin was 18%.