Natura Cosméticos (NATU3) Q3 2025 earnings summary

Executive summary

• Q3 2025 results were pressured by macroeconomic headwinds, operational disruptions, and slow innovation, with revenue declines across all main geographies and brands, especially Avon.

• Corporate simplification advanced, including the sale of Avon Central America and Dominican Republic, agreement to sell Avon International (ex-Russia), and completion of Avon CARD divestment.

• Net income from continuing operations was BRL -119 million, reflecting revenue drop and profitability deterioration.

• Integration of Natura and Avon brands completed in all Latam markets; Argentina faced temporary operational disturbances, while Mexico is rebounding.

• ESG initiatives advanced, including sustainability reporting, Amazon agroforestry projects, and recognition for diversity and climate leadership.

Financial highlights

• Q3-25 net revenues were BRL 5,194 million, down 13.1% YoY; 9M-25 net revenues at BRL 16,024 million, down 1.9% YoY.

• Underlying EBITDA margin was 11.1% in Q3-25, down 350 bps YoY; Latam margin at 11.7%, down 360 bps YoY.

• Net loss from consolidated results was BRL -1,926 million, including a non-operating, non-cash impairment of BRL 1.8 billion for Avon International.

• Net debt stood at BRL 4.0 billion; leverage increased to 2.53x Net Debt/EBITDA, mainly due to lower EBITDA.

• Free cash flow to firm for 9M-25 was BRL 301 million, down BRL 81 million YoY; Q3-25 free cash flow from continuing operations was an outflow of BRL -101 million.

Outlook and guidance

• Commitment to expand recurring/underlying EBITDA margin in FY 2025 versus FY 2024, with margin improvement expected as early as Q4 2025.

• Tactical actions in Q3-25 are expected to yield greater efficiencies in Q4-25.

• Recovery in Mexico and gradual improvement in Argentina are anticipated to drive margin recovery.

• Structural efficiency initiatives and organizational simplification are expected to yield benefits from 2026, supporting sustainable growth and higher returns.