Consumer Defensive - Household & Personal Products
Strategic Profile
The company is strategically maneuvering to bolster profitability following significant restructuring, with a focus on innovation and marketing in Latin America, particularly Brazil where it sees substantial growth potential. The Wave-2 project aims to increase efficiency and reduce costs in Brazil, Argentina, and Mexico through cost-sharing initiatives.
Cyborg Score Rationale
Natura & Co is navigating a challenging transformation phase with restructuring investments and Avon integration headwinds, yet showing operational margin expansion in core LATAM segment. The company expects profitability recovery by 2026 but faces near-term headwinds from Wave-2 implementation costs and market volatility.
Top Insights
Wave-2 restructuring project is delivering margin expansion in Hispanic markets (15% EBITDA margin achieved) but creates short-term revenue volatility through consultant team optimization
Avon International deconsolidation due to bankruptcy proceedings removed significant loss-making operations, improving consolidated profitability trajectory
Digital sales represent only 7.1% of addressable market while retail stores at 11.6%, indicating significant omnichannel expansion opportunity
2025 projected net revenues of R$30.4 billion with positive earnings inflection expected in 2026 after marketing investments and integration costs
Named Competitors
Premium Beauty Products — Global luxury and premium beauty conglomerate
Cosmetics & Personal Care — Multinational beauty and personal care leader
Direct Selling Beauty — Direct selling health and beauty distributor
Recent Developments
(January 2025) Itaú BBA projects R$17 target price with 37% upside; forecasts 2025 revenue of R$30.4 billion and 2026 profitability recovery
(August 2024) Natura & Co Latam achieved 15% recurring EBITDA margin, +50 bps YoY improvement through Wave-2 efficiency gains
(Mid-2024) Avon Products Inc deconsolidation due to Chapter 11 process improved consolidated financials
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