Natura &Co (NYSE–NTCO; B3–NTCO3) significantly outperformed the global Cosmetics, Fragrance, and Toiletries (CFT) market in Q3 2020 with strong sales growth and margin improvement.
Natura &Co posted a strong growth in revenue in the third quarter as the sustained ramp-up in digital sales across all brands continued. Consolidated sales stood at R$10.4 billion, up 31.7 percent in Brazilian Reais and 11.6 percent at constant currency.
The Group also strengthened its capital structure with the successful completion in October of a US$1 billion capital raise. The transaction allows for balance sheet optimization by accelerating deleveraging while also enabling investments to drive growth in strategic priorities including Avon’s integration, Group digitalization, geographic expansion and the Group’s 2030 Sustainability commitments.
Roberto Marques, Executive Chairman and Group CEO of Natura &Co, declared: “Enabled by continued digitalization, our brands delivered strong results in the third quarter, with significant growth in sales and margin improvement. In an environment that has remained challenging throughout the world as a result of the COVID-19 pandemic, we delivered superior results compared to the CFT market both globally and in Brazil. Our performance this quarter attests to the strength of our fundamentals, our unparalleled direct-to-consumer reach, and the resilience of our omnichannel, multi-brand model.”
Natura &Co’s consolidated net revenue growth was driven by outperformance by both Natura and Aesop, solid growth by The Body Shop, and growth in sales by Avon.
Even as many retail markets reopened, the Group experienced continued strong acceleration in digital social selling and e-commerce, with total e-commerce sales growing more than 115 percent in the quarter vs. the same period last year. At Natura and Avon combined, e-commerce sales grew more than 80 percent through consultants sharing their online stores.
At Avon globally, sales via representatives sharing e-brochures more than doubled, and the number of consumers accessing Avon’s e-brochure increased nearly 70 percent vs. Q3 2019. At Natura, content sharing grew by more than 170 percent since the first quarter of this year, and the number of orders increased 45 percent vs. Q3 2019 through the more than 1 million consultant online stores (+75% vs. Q3-19).
Natura &Co Latam’s net revenue increased by 29.5 percent in BRL. The Natura brand’s net revenue rose by a very strong 41.2 percent in BRL, supported by both Brazil (+30.5%), outperforming the domestic CFT market, and Hispanic Latam (+65.7%). The Avon brand’s net revenue increased by 19.3 percent in BRL (+9.9% at CC). Excluding the cyber incident effect that shifted R$390 million in sales to Q3, Avon sales were up 3.3 percent, including +6.1 percent in Brazil, its first growth in the country since Q4 2018, thanks to increased representative numbers and higher activity.
Avon International, which comprises Avon’s activities in 50 markets throughout Europe, Asia, Africa and the Middle East, saw its Q3 net revenue grow by 22.5 percent in BRL as most markets showed signs of recovery. Excluding the positive phasing effect of R$60 million from the cyber incident, growth was 19.5 percent. Avon’s new brand campaign, Watch Me Now, premiered in September across more than 30 countries.