By Brasil Stock Guide – Natura Cosméticos SA (B3: NATU3) reported a wider first-quarter loss as weaker revenue in Brazil, pressure in Argentina and restructuring expenses weighed on profitability, according to the company’s Q1-26 earnings release. Natura shares now trade under NATU3 on B3 after the incorporation of Natura &Co by Natura Cosméticos and the replacement of the previous NTCO3 ticker.
Net revenue fell 7.7% from a year earlier to 4.745 billion reais, while revenue declined 3.7% on a constant-currency basis, Natura said in the filing. EBITDA dropped to 346 million reais, with margin narrowing to 7.3% from 12.6% a year earlier, as extraordinary expenses tied to the company’s reorganization and operating deleverage hit results.
The company posted a net loss of 445 million reais, compared with a 50 million-real loss from continuing operations in the same period last year. Natura said the deterioration reflected a 307 million-real decline in EBIT and weaker financial results, mainly due to losses related to hedges on dollar-denominated debt.
Brazil remained the main drag. Net revenue in the country fell 5.5% year-on-year, reflecting a 3% decline in the Natura brand and a 13.8% drop at Avon, whose relaunch began in mid-March. The company cited weaker consumer demand in Brazil’s Northeast, service-level issues and reduced activity among less productive consultants.
Natura said there were early signs of improvement, including stronger sell-out performance for the Natura brand and better brand-health indicators for Avon. The company said Avon’s new products sold above expectations, though they still accounted for a small share of total sales.
In Hispanic markets, revenue fell 10.5% in reais and 1.1% on a constant-currency basis. Natura said growth outside Argentina was offset by a slow recovery in the country after the integration of Natura and Avon operations, amid weaker consumption and foreign-exchange pressure.
The company’s Hispanic EBITDA was negative 31 million reais, with a margin of minus 1.5%. Brazil EBITDA reached 369 million reais, with a 13.8% margin, down 860 basis points from a year earlier.
Natura’s net debt rose by 565 million reais from the previous quarter to 4.0 billion reais. The company attributed the increase to non-core cash outflows, including about 240 million reais in severance payments, around 90 million reais in remaining simplification costs and a 367 million-real down payment related to the Chapman litigation settlement, partly offset by proceeds from the sale of Avon Russia.
The leverage ratio reached 2.11 times, up from the fourth quarter, reflecting cash consumption and lower EBITDA. Natura said savings from its new operating model did not materialize in the first quarter but should begin to appear meaningfully from the second quarter, with full potential expected only in the second half of the year.
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