By Brazil Stock Guide – Natura Cosméticos S.A. (B3: NATU3) posted a net loss of R$1.46 billion in the third quarter of 2025, reversing a profit of R$684.9 million a year earlier. The result was weighed down by the write-off of Avon International, whose symbolic £1 sale was agreed in September, and by the completion of the reverse merger with former parent Natura &Co. Despite the accounting impact, net revenue rose 7.1% to R$15.6 billion, supported by stronger performance in Brazil and Latin America.
The quarter marked the end of the holding structure and the creation of a single publicly traded company on B3’s Novo Mercado. The Avon International transaction — still pending completion, expected in early 2026 — triggered a R$1.7 billion impairment, reflecting the write-down of assets held for sale. The merger lifted shareholders’ equity to R$13 billion, up from R$9.2 billion in 2024, while paid-in capital increased to R$6 billion, with a new R$1.58 billion capital reserve.
Operating performance strengthened. Adjusted EBITDA rose 15% year-on-year to R$1.6 billion, yielding a 10.4% margin, thanks to improved leverage in Brazil and tighter cost discipline across Latin America. “We are reorganizing the house for a new cycle of growth and simplification, focused on efficiency and full integration across brands and markets,” said CEO Fábio Barbosa.
Financial expenses totaled R$605 million, largely due to currency effects on U.S.-dollar debt. Excluding these non-cash items, the company’s underlying financial position remained stable, supported by stronger operating cash generation. Operating cash flow was positive at R$343 million, reflecting improved working-capital management and expense control during the transition period.
Revenue growth came primarily from the Natura & Avon brands in Brazil, up 8.7%, driven by higher digital engagement and stable pricing. In other Latin-American markets, sales advanced 3.4%, while online channels expanded 12% globally, now accounting for more than half of domestic volume. The company has been trimming overlaps, simplifying management layers, and concentrating resources on its core markets — Brazil, Chile, Colombia and Mexico.
The reverse-merger structure, through which the former subsidiary absorbed its parent, is expected to yield tax and reporting efficiencies, eliminating redundant entities and corporate costs. The transaction added R$4 billion to share capital and generated a R$1.58 billion reserve from the dissolution of Natura &Co Holding S.A., aligning the financial statements with the company’s new integrated model.
The move fits into a strategic realignment launched in 2023, after the sale of The Body Shop and the redesign of Avon’s global footprint. Since then, Natura has sought to restore margins and profitability by focusing on higher-return regions and divesting from mature markets. The Avon International divestment — effectively without financial consideration — closes the expansionist chapter that followed the company’s IPO.
At the same time, Natura has accelerated digital and hybrid-sales integration, pillars of its “Integrated Natura” plan. Beauty consultants now operate under a hybrid model supported by apps and regional logistics hubs. The group continues to rationalize inventories and supplier contracts to protect margins amid volatile exchange rates and interest costs.
Management reaffirmed that 2026 will be a transition year focused on normalized profitability and stronger free-cash generation as Natura reaps the benefits of its simplified structure and renewed focus on Latin America.
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