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NATU3 · Natura
NATU3 is trading at 9.94 today; the session move is +1.53%. The peer strip below gives the immediate market context.
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Natura Earnings: What Happened in Q4 2025
Natura Cosméticos, Brazil’s largest beauty-and-personal-care group operating the Natura and Avon brands across Latin America through a network of over 6 million consultants and representatives, reported fourth-quarter 2025 results on March 16 that showed a clear inflection in profitability. Natura earnings are covered by The Rio Times as part of its Latin American financial news reporting on B3-listed consumer companies.
Net income from continuing operations reached R$186 million ($36M), reversing a R$227 million loss in 4Q24. The result was pressured by a non-cash, non-recurring provision of R$434 million ($83M) related to receivables from The Body Shop sale. Excluding this charge, underlying profit would have been R$620 million ($118M).
Revenue declined 12.1% to R$6.19 billion ($1.18B), hurt by weaker Brazil sales and the devastating impact of hyperinflation and currency devaluation on Argentine operations. Despite the top-line contraction, recurring EBITDA surged 57.2% to R$978 million ($187M) with a 15.8% margin — a roughly 7 percentage-point expansion that reflects the cost-restructuring payoff from integrating Natura and Avon. Shares of NATU3 traded around R$8.89 as of March 11, down approximately 35% from the 52-week high of R$13.66.
Key Drivers Behind Natura’s Q4 2025 Results
Integration-Driven Margin Expansion
The 57.2% recurring EBITDA jump on declining revenue tells the story of a business aggressively cutting costs. Selling expenses fell 20.5% in the quarter, driven by the revenue decline and commercial optimizations. G&A expenses dropped 20%, reflecting efficiency gains from the Natura-Avon integration, the wind-down of the former Natura&Co holding structure, and reductions in variable compensation.
The completion of the “Wave 2” integration process, which consolidated Natura and Avon operations across Latin American markets, was the primary catalyst. Management noted that the integration is now complete in Brazil and nearing completion in Mexico, though Argentina remains in stabilization mode due to hyperinflation-related disruptions.
Brazil Decelerates, Digital Advances
Brazilian revenue fell 4.8% to R$3.77 billion ($719M), impacted by a decline in consultant activity — particularly among less-productive representatives — and continued softness in Avon Brazil, which is awaiting traction from the brand relaunch initiated in March 2025. The Natura brand experienced only slight weakness, driven by the deliberate pruning of underperforming consultants.
Digital sales were a bright spot, surging 24.5% in 4Q25, propelled by live-commerce initiatives and the ongoing digitalization of the consultant base. This channel shift represents a strategic response to the maturation of the direct-sales model, which JPMorgan has flagged as accounting for approximately 25% of Brazil’s beauty market but gradually ceding ground to physical retail and e-commerce.
Hispanic America Under Pressure
Hispanic America revenue dropped 21.5% to R$2.42 billion ($462M), primarily due to Argentine hyperinflation, currency devaluation, and integration disruptions during the Wave 2 transition from paper catalogs to fully digital operations. Mexico has been stabilizing, but Argentina remains the most challenging market and the primary drag on regional performance.
Natura Q4 2025 Financial Detail
Revenue and Profitability
Net revenue of R$6.19 billion ($1.18B) fell 12.1% year-on-year. Recurring EBITDA reached R$978 million ($187M), up 57.2%, with a margin of 15.8% — expanding approximately 7 percentage points and far exceeding the 9.1% 4Q24 margin. For FY2025, net revenue totaled R$22.2 billion ($4.24B), down 5%, while recurring EBITDA grew 9.5% to R$3.1 billion ($591M), demonstrating that profitability improvement persisted even through the difficult 3Q25.
The annual return to profit was significant: FY2025 continuing-operations net income reached R$463 million ($88M), reversing a R$644 million loss in FY2024. This transformation came despite the R$434 million Body Shop receivables provision in 4Q25 and a R$1.93 billion consolidated loss in 3Q25 that had rattled markets.
Financial Result and Leverage
The net financial result swung to negative R$128 million ($24M) from a positive R$28 million in 4Q24, driven by higher CDI-linked interest costs of R$156 million ($30M). Net debt fell R$567 million to R$3.5 billion ($668M) by December, aided by seasonal year-end cash generation. Reported leverage stood at 1.57x net debt/EBITDA, improving to 1.31x on a recurring basis excluding non-recurring items — within the company’s target range and a dramatic improvement from the leverage concerns that plagued the Natura&Co era.
Management Signals from Natura
Natura characterized 4Q25 as the final quarter of its multi-year transformation costs, with the completion of the Wave 2 integration and the corporate simplification from Natura&Co Holding back to Natura Cosméticos (NATU3). From 1Q26 onward, the company expects no further restructuring charges.
The sale of Avon International (ex-Russia) to Regent, expected to close in early 2026, will eliminate a major source of accounting noise and strategic distraction. Natura retains the Avon brand for Latin America, where the integration is now delivering synergies. The Avon brand relaunch in Brazil, initiated in March 2025, is expected to begin showing traction in 2026.
Management emphasized that the company’s new operating model, built around the simplified Natura + Avon Latin America structure, should generate efficiency benefits throughout 2026. The sharp 20% reductions in both selling and G&A expenses in 4Q25 were presented as evidence that the integration thesis is delivering.
What to Watch Next for Natura
Revenue recovery is the critical test for 2026. While margins have expanded dramatically, the 12.1% quarterly and 5% annual revenue declines raise questions about whether the cost-cutting gains are sustainable without top-line growth. The Avon relaunch in Brazil and stabilization in Argentina will be the key revenue catalysts to watch.
The closing of the Avon International sale to Regent in early 2026 will remove a persistent overhang. Once complete, Natura’s financial statements will be cleaner and more comparable, potentially attracting investor interest that has been deterred by the accounting complexity of the past two years.
The anticipated Selic rate-cutting cycle should ease financial costs (the R$156 million in quarterly interest expenses) and support consumer purchasing power in Brazil — both direct benefits for a non-essential consumer goods company. Digital sales growth of 24.5% represents a structural shift that could partially offset the secular maturation of the direct-sales channel.
Natura Quarterly Results (4Q25 vs 4Q24)
| Metric | 4Q24 | 4Q25 | Chg |
|---|---|---|---|
| Net Revenue | R$7.04 bn | R$6.19 bn ($1.18B) | −12.1% |
| — Brazil | R$3.96 bn | R$3.77 bn ($719M) | −4.8% |
| — Hispanic America | R$3.08 bn | R$2.42 bn ($462M) | −21.5% |
| Recurring EBITDA | R$622 mn | R$978 mn ($187M) | +57.2% |
| Recurring EBITDA Margin | ~8.8% | 15.8% | +~7pp |
| Net Income (cont. ops) | (R$227 mn) | R$186 mn ($36M) | reversal |
| Adj. NI (ex-Body Shop prov.) | R$299 mn | R$620 mn ($118M) | +R$321 mn |
| Digital Sales Growth | — | +24.5% | — |
Natura Annual and Balance Sheet Summary (FY2025)
| Metric | FY2024 | FY2025 | Chg |
|---|---|---|---|
| Net Revenue | R$23.4 bn | R$22.2 bn ($4.24B) | −5.0% |
| Recurring EBITDA | R$2.83 bn | R$3.10 bn ($591M) | +9.5% |
| Net Income (cont. ops) | (R$644 mn) | R$463 mn ($88M) | reversal |
| Net Debt (Dec) | — | R$3.5 bn ($668M) | −R$567 mn QoQ |
| Net Debt / EBITDA (recurring) | — | 1.31x | — |
Risks Facing Natura
Revenue stagnation is the central risk to the Natura earnings thesis. The cost-restructuring gains that powered the EBITDA expansion have natural limits, and sustained profitability improvement will ultimately require top-line stabilization or growth. Both the Brazil deceleration and Argentine instability could persist into 2026.
The Avon brand relaunch remains unproven. After years of integration work and billions in restructuring costs, the market is waiting for concrete evidence that the combined Natura-Avon model can grow revenue, not just cut costs. The direct-sales channel continues to mature structurally, and the shift to digital is necessary but disruptive.
Analyst sentiment is cautious. Of 11 analysts covering the stock, only 3 recommend buying versus 8 neutral ratings. Itaú BBA maintains an outperform rating with a R$13 target, while BB-BI cut its target to R$10.80 (neutral), Morgan Stanley holds at R$10 (equalweight), and XP maintains buy. The stock’s 35% decline from its 52-week high reflects the market’s impatience with the turnaround timeline.
Brazilian Beauty and Personal Care Sector Context
Brazil is the world’s fourth-largest beauty and personal-care market, but the sector faces headwinds from high interest rates suppressing discretionary spending and the structural decline of the traditional direct-sales model that built Natura’s original franchise. The channel that once drove the industry’s growth now accounts for a shrinking share as consumers shift to physical retail, e-commerce, and social selling.
Natura’s multi-year transformation — acquiring Avon, The Body Shop, and Aesop, then divesting all but the Latin American Natura and Avon operations — has been among the most dramatic corporate restructurings in Brazilian history. The 4Q25 results represent the first clean quarter showing the strategy’s potential, with the EBITDA margin of 15.8% far exceeding the 9.1% trough of a year ago.
The competitive landscape in Latin American beauty is intensifying, with international players expanding and digital-native brands gaining share. Natura’s advantage lies in its consultant network of over 6 million representatives and its strong brand equity in sustainability and natural products — assets that digital competitors cannot easily replicate but must be continuously reinvented to remain relevant.
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