Natura &Co, the owner of the Avon, The Body Shop and Aesop retail brands, has posted another set of disappointing results due to the increasingly difficult trading conditions.
During the second quarter to 30 June, the Brazilian group saw its group revenue decline 8.6% to R$8.7bn (€1.68bn). However, it edged up 0.4% on a constant currency (CC) basis.
Revenue at The Body Shop fell by 25.3% (-11.8% at CC), mainly impacted by a post-lockdown channel rebalancing, as a decrease in sales at its ‘At Home’ unit and e-commerce operation outpaced a footfall recovery in its retail stores.
Sales at Avon declined 25.4% (-11.4% at CC). The brand’s performance was mainly impacted by the war in Ukraine, low consumer confidence and eroding household purchasing power in Europe, as well as fewer representatives in the region.
Meanwhile, revenue at Aesop increased 5.7% (+24.5% at CC) after the brand delivered double-digit growth in all markets led by North America and Asia-Pacific. It is continuing to roll out new stores in cities as well as in existing markets such as Japan, South Korea, Canada and Australia.
Fabio Barbosa, group chief executive of Natura & Co, said: “Natura &Co’s second quarter results reflect the difficult environment in which we are operating, marked by high inflation that is pressuring consumer spending, supply chain disruption and continuing macro-economic and geopolitical uncertainty. But they also reflect structural issues within our group that we have clearly identified and have started to address.
He added: “Though we expect our businesses’ revenues to trend better in the second half of the year, we believe the challenges in the macro environment will persist and our margins will remain pressured in the short term. In this context, our clear and immediate priority is to focus on margins and operational cash-flow, and the teams at all our brands and businesses are mobilised and incentivised on those clear goals.”
NAM Implications:
- “our clear and immediate priority is to focus on margins and operational cash-flow”
- For this, read:
- No/minimal CPIs
- Smaller, more frequent, deliveries
- A little longer to pay…
- Unless you have other views?
