The Body Shop owner Natura & Co sees sales drop in Q1

Natura & Co, owners of Natura, Aesop, The Body Shop and Avon, has released its financial results for Q1 2022, with rising inflation, cost pressures in the supply chain and effects of the war in Ukraine impacting the group's results.

Net revenue was down -4.6% in constant currency to £1.3 billion (R$8.3 billion), against £1.5 billion (R$9.4 billion) in 2021.

Adjusted EBITDA decreased to £95.9 million (R$595.9 million), compared to £155 million (R$963.2 million) in 2021. Net income made a loss of £103.5 million (R$643.1 million), against a loss of £24.9 million (R$155.2 million) in 2021.

Digitally-enabled sales reached 50.8% of total revenue, compared to 47.7% in 2021 and 35% in 2020, driven by continued growth at Natura and Avon.

The Body Shop's revenue declined -16% in constant currency. In the UK, revenue dropped -26.3% against 2021 but was up +5.1% against 2020 and +8.0% against 2019.

After outperforming during lockdowns, The Body Shop At Home saw a steep decline in consultant numbers as economies reopened and franchisees are slowly recovering from lockdowns.

Avon International's revenue was down -10.1% in constant currency, due to the war in Ukraine, lower disposable income in Europe from rising inflation and fewer representatives.

Aesop's revenue was up +21.3% in constant currency, with all markets delivering double digit growth, led by North America and APAC.

Roberto Marques, CEO and Executive Chairman of Natura &Co, said: “We continued to face a challenging environment in Q1-22, on top of a very tough comp and unfavourable currency movements. We expect the environment to remain challenging in Q2 and will continue to take measures including further cost containment and strict financial discipline on investments in order to protect our profitability and cash generation."