Brazilian global personal care cosmetics group Natura &Co began 2025 with solid revenue growth in Latin America, led by strong demand for the Natura brand in Hispanic markets and steady performance in Brazil. The company cited “mid-teens” revenue growth in Spanish-speaking countries (excluding Argentina) and “high single-digit growth” in Brazil, according to its Q1 Earnings Release.
This performance helped offset continued weakness from the Avon brand and the company’s Home & Style category.
Growth in the region was supported by the ongoing implementation of the company’s Wave 2 profitability program, which includes operational improvements and margin optimization. Natura &Co Latam reported a recurring EBITDA margin of 15.0% in Q1, a marked improvement from the prior quarter.
Management said the quarter “kicked off to the ultimate goal of achieving year-on-year expansion of recurring EBITDA margin for the full year 2025,” emphasizing that the rollout of Wave 2 initiatives will be completed in Mexico and Argentina by the third quarter.
Avon restructuring accelerates
Avon International continued to underperform in Q1, contributing to margin pressure and cash outflows. In response, Natura &Co has fast-tracked restructuring efforts, including “a significant reduction in headcount affecting around 1,100 employees or 25% of total staff” and other cost-cutting actions, according to the company’s Earnings Report.
These changes began in Q1, with the company expecting the largest impact to occur between Q2 and Q3.
The company is also exploring “strategic opportunities for Avon International,” including a possible divestment, as it realigns its focus on its core Latin American business.
Corporate simplification and strategic focus
Natura &Co completed the merger of its holding structure into Natura Cosméticos in April, with shareholders approving the move as part of its simplification strategy. As of Q2, the management team at Natura Cosméticos now leads the consolidated company.
The company also reported a 55% year-over-year reduction in corporate expenses, attributed to the final steps of the streamlining process and some short-term timing benefits. Natura &Co said these measures are expected to be fully completed by the third quarter.
Sustainability and innovation remain core pillars
Despite ongoing restructuring, the company reaffirmed its long-term commitments to sustainability and product innovation. “We remain committed to our ESG agenda, which is a significant pillar of our culture,” management stated in Natura &Co’s Earnings Release.
In Q1, the company was recognized by the Ethisphere Institute as one of the World’s Most Ethical Companies and received Environmental Finance’s “Corporate Sustainability Bond of the Year” award.
Investments in marketing and innovation are expected to continue through the year, with Natura &Co highlighting plans for “bigger and bolder innovations” and a “more diversified channel” strategy, according to management. At the conclusion of its Earnings Release, the company emphasized that reinvestments would be paced more evenly across quarters in 2025 to support long-term growth.
