Natura & Co Holding S.A. stock (BRNTCOACNOR5): turnaround efforts and latest earnings in focus

Natura & Co Holding S.A. has stayed on the radar of global equity investors following its recent quarterly earnings update and ongoing portfolio streamlining, including the announced sale of Avon’s Latin American operations. The beauty and personal care group is working to improve margins and reduce leverage after a period of heavy expansion, according to a results release published in March 2025 and subsequent strategic updates reported by financial media in early 2025 and 2026, including Reuters as of 03/07/2025 and company disclosures on its investor relations website dated 03/07/2025.

As of: 05/20/2026

By the editorial team – specialized in equity coverage.

Natura & Co Holding S.A.: core business model

Natura & Co Holding S.A. is a Brazilian-based beauty and personal care group that has grown through a combination of organic expansion and acquisitions. The group’s portfolio has included Natura, Avon, The Body Shop and Aesop at various points, with each brand targeting different consumer segments and price points. Over time, the company has built a multibrand platform with strong exposure to emerging markets, especially Brazil and the wider Latin American region.

The group historically relied heavily on direct selling, where independent consultants or representatives sell beauty products in their communities. This model, used by both Natura and Avon, created a broad physical reach in markets with relatively low penetration of organized retail. At the same time, Natura & Co has expanded into retail stores and e-commerce, operating owned outlets such as Natura and The Body Shop stores, while also selling via digital platforms. This mix of channels is central to the company’s strategy of meeting consumers wherever they prefer to shop.

In recent years, management has focused on simplifying the portfolio and prioritizing higher-margin activities. The sale of Australian brand Aesop, announced in April 2023 and completed later that year, was a key step in this direction, generating cash and allowing a sharper focus on core Latin American operations, according to Reuters as of 04/03/2023. The group has also been reassessing the future of Avon’s businesses in various geographies, seeking to improve profitability and reduce complexity.

Environmental and social considerations are another element of the business model. Natura has long highlighted its sustainability credentials, including sourcing natural ingredients from the Amazon region and promoting refillable packaging. These initiatives have been communicated as part of the company’s value proposition to consumers who are increasingly focused on environmental impact. While such programs can involve upfront costs, management has indicated that they support the strength of the brands and may help underpin pricing over the long term.

Main revenue and product drivers for Natura & Co Holding S.A.

Natura & Co’s revenue is primarily generated from the sale of cosmetics, fragrances and personal care products across its brand portfolio. The Natura brand focuses on skin care, body care, fragrances and hair care, often emphasizing natural ingredients. Avon has been best known for mass-market cosmetics and fragrances sold via a large network of representatives. The Body Shop adds a retail-oriented assortment focused on ethical and cruelty-free products, while Aesop (before its divestment) contributed premium skin care and fragrances with a minimalist aesthetic.

Geographically, Latin America is the largest contributor to group sales, with Brazil being the most important single market. The Natura brand has strong recognition in Brazil, while Avon brings an extensive reach in several Latin American countries. The company also has exposure to developed markets in Europe and North America via The Body Shop and historical Aesop operations. However, management has in recent years emphasized the need to improve profitability in mature markets and reallocate resources toward regions with better growth and margin prospects, according to commentary in its 2023 and 2024 results materials cited by Reuters as of 03/07/2024.

Product innovation and marketing campaigns are key levers for sustaining revenue. The company frequently launches new lines or limited-edition ranges to maintain consumer interest. In the direct-selling channel, incentives and training for consultants and representatives are crucial for driving sales volume, as engaged sellers tend to generate higher average orders. In retail stores and e-commerce, merchandising, store experience and digital marketing play a larger role. The company’s omnichannel approach aims to combine the relationship-based nature of direct selling with the convenience of online shopping.

Exchange rates add another dimension to revenue performance. Because the group reports its financials in Brazilian reais while also generating sales in other currencies, fluctuations in foreign exchange can positively or negatively impact reported revenue and margins. For U.S.-based investors trading the American depositary shares on the NYSE, currency moves between the Brazilian real and the U.S. dollar can influence both the translated value of the shares and the dollar value of any dividends.

Recent earnings trends and strategic moves

Natura & Co has been in a transition phase as it works to strengthen its balance sheet and improve profitability. In March 2024, the company reported financial results that indicated a narrowing loss compared with the previous year, helped by cost controls and the earlier sale of Aesop. Management noted that the core Natura business in Brazil delivered more resilient performance, while some non-core operations remained under review, according to Reuters as of 03/07/2024. The focus on cash generation and debt reduction has been a recurring theme in communications with investors.

Subsequent quarters continued to reflect this reshaping agenda. The company updated the market on its plans for Avon in Latin America, including a proposed separation of certain operations to help streamline the portfolio and unlock value. This culminated in a planned sale of the Avon brand in selected markets, subject to regulatory approvals, as reported by financial media in late 2024 and early 2025. These moves aim to reduce complexity and allow management to concentrate on stronger-performing brands and regions, although they also involve transaction costs and execution risks during the transition period.

Operationally, Natura & Co has been working to integrate back-office functions and supply chains where it sees synergies. Shared manufacturing facilities, consolidated logistics and unified technology platforms are intended to cut costs and enhance efficiency. At the same time, the company has indicated that it wants to maintain distinct brand identities in the eyes of consumers, avoiding excessive homogenization of products or marketing across Natura, Avon and The Body Shop. Balancing efficiency with brand differentiation is a central challenge of the restructuring.

For investors, one of the key questions has been the pace at which the turnaround will translate into stronger margins and consistent free cash flow generation. The sale of Aesop provided a one-time boost to cash and allowed debt reduction, but underlying performance in the remaining businesses must sustain the improved financial profile. Management has signaled medium-term margin targets and deleveraging ambitions in its presentations, though these are subject to macroeconomic conditions, competitive dynamics and execution on cost-saving programs.

Capital structure, liquidity and financial profile

The capital structure of Natura & Co reflects both its history of acquisitions and the subsequent efforts to reduce leverage. Following the Aesop transaction, the company used part of the proceeds to pay down debt, leading to an improvement in net debt metrics that was highlighted in its 2023 and 2024 financial reports. Rating agencies and sell-side analysts have closely monitored these trends, viewing balance sheet flexibility as an important factor in the company’s ability to navigate volatility in consumer spending.

Liquidity is supported by cash on hand and committed credit lines, as described in the notes to its annual and quarterly reports. The company’s investor materials have emphasized disciplined capital allocation, with a priority on operational investment and debt reduction before considering any substantial shareholder distributions. Dividend policies can vary over time depending on profitability and leverage, and investors often watch earnings releases for updates on payout intentions. For U.S. investors, any dividend from the Brazilian listing converted into U.S. dollars may be affected by foreign exchange rates and withholding taxes under Brazilian law.

From an equity market perspective, the stock trades both on the B3 exchange in São Paulo and on the New York Stock Exchange via American depositary shares. Dual listing can support a broader investor base, enabling participation from domestic Brazilian investors as well as global institutions and U.S. retail investors. Trading volumes and liquidity may differ between the two venues, and price moves can be influenced by local market sentiment, sector news and macroeconomic developments in Brazil and other key markets.

In addition to traditional debt and equity financing, the company has from time to time used structured instruments or specific funding programs aligned with sustainability goals. Examples in the broader Latin American market include sustainability-linked bonds or loans, where interest rates may vary depending on the borrower’s performance against defined environmental or social targets. When used, such instruments can reinforce a company’s ESG positioning while providing financial incentives to meet stated goals, though they also require careful reporting and verification.

Industry trends and competitive position

The global beauty and personal care industry has generally shown resilience over economic cycles, with demand supported by everyday consumption and premiumization trends. However, competition is intense, ranging from multinational groups with global brands to local and regional players. In Latin America, Natura & Co competes with large international companies as well as domestic rivals that may have deep knowledge of local consumer preferences. The direct-selling model, where it has long experience, faces structural changes as consumers increasingly shift to online channels.

Digitalization is reshaping how beauty products are marketed and sold. Social media, influencers and online reviews have become critical drivers of brand awareness and conversion. Natura & Co has been investing in digital tools for its consultants and representatives, enabling them to use social platforms and e-commerce storefronts to reach customers. At the same time, company-owned websites and apps aim to provide a seamless shopping experience. The success of these initiatives can influence both revenue growth and the effectiveness of marketing spend.

Regulation and sustainability are also important industry themes. Many jurisdictions have tightened rules on product ingredients, animal testing and environmental claims, requiring continuous compliance efforts. Natura & Co’s emphasis on natural ingredients and social impact may align with some of these trends, but it must also ensure that supply chains remain robust and cost-effective. The Amazon region, for example, is both a source of unique biodiversity and an area under environmental scrutiny, which can affect sourcing policies and stakeholder expectations.

Why Natura & Co Holding S.A. matters for U.S. investors

For U.S.-based investors, Natura & Co offers exposure to the beauty and personal care segment in emerging markets, particularly Brazil and the broader Latin American region. This can provide diversification relative to U.S.-domiciled beauty companies that are more heavily exposed to North American and European demand. The group’s dual listing on the NYSE makes it accessible through standard brokerage accounts, and its sector is familiar to many retail investors who follow global consumer brands.

At the same time, investing in a Latin American-focused group introduces additional considerations compared with U.S.-centric peers. Macroeconomic volatility, currency fluctuations, changes in local tax policies and political developments can influence the company’s results and valuation. For example, periods of higher inflation or weaker consumer confidence in Brazil can affect discretionary spending on non-essential items such as premium cosmetics, impacting sales volumes and mix. U.S. investors therefore often track not only company news but also indicators such as Brazilian interest rates and currency trends.

Natura & Co’s restructuring and portfolio streamlining may also make the stock more event-driven in the near to medium term. Announcements regarding brand divestments, strategic partnerships or changes in capital allocation could affect market expectations and share price performance. Because the company has highlighted deleveraging and margin improvement as priorities, investors may closely monitor each quarterly report for updates on these metrics. Such dynamics can lead to periods of higher share price volatility around earnings releases.

Risks and open questions

The investment case for Natura & Co involves several risks and uncertainties that investors typically weigh alongside potential opportunities. Execution risk around the ongoing restructuring is one of the most prominent. Integrating operations, divesting assets and reshaping the brand portfolio can be complex, and delays or cost overruns could limit the expected benefits. There is also a risk that management attention becomes stretched across multiple strategic initiatives, potentially affecting day-to-day operational performance.

Another set of risks stems from macroeconomic and currency factors. Because a large portion of the company’s revenues and costs are denominated in Brazilian reais and other Latin American currencies, depreciation against the U.S. dollar can reduce the translated value of earnings and cash flows for holders of the NYSE-listed shares. Inflationary pressures in key markets can also affect input costs and consumer purchasing power, requiring pricing and cost measures to protect margins.

Competitive dynamics present additional challenges. Established global beauty groups and fast-growing local brands compete for shelf space, online visibility and consumer loyalty. If Natura & Co’s product pipeline or marketing efforts fail to resonate with consumers, it could lose market share. Regulatory changes, such as new rules on ingredients or sustainability disclosures, also pose compliance and operational risks. These factors, combined with the inherent volatility of equity markets, contribute to uncertainty around future financial performance.

Conclusion

Natura & Co Holding S.A. is reshaping its business after a period of rapid expansion, focusing on core brands and markets while seeking to improve margins and reduce leverage. The sale of Aesop and the planned adjustments around Avon illustrate a shift toward a more streamlined portfolio centered on Latin America and targeted international operations. For U.S. investors, the stock offers exposure to the global beauty sector with a distinctive emerging-markets profile but also introduces risks related to currency, macroeconomic volatility and execution of the ongoing restructuring. How effectively management delivers on its strategic objectives and translates them into sustainable profitability and cash generation will likely remain a key theme in the company’s quarterly updates and market perception.

Disclaimer: This article does not constitute investment advice. Stocks are volatile financial instruments.

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