Natura &Co, the parent company of The Body Shop, Aesop and Avon, released its financial results for the second quarter of 2022, posting net sales of $1.6 billion and net profit of $146.8 million. dollars.
Digital sales represented a significant portion of total company sales (49.5%) and were above pre-pandemic levels across all business units.
Avon International’s net sales fell 11% in the quarter, mainly due to the ongoing conflict in Ukraine and the reduced purchasing power of European households. The new business model that has been implemented in 16 markets has resulted in an increase in productivity and activity and a stabilization of the number of representatives outside Europe.
Similarly, The Body Shop’s net revenue was down 11.8% in the second quarter, but store revenue was up from the same quarter last year. Company management is now focused on leveraging recent investments to boost store productivity, as well as optimizing store footprint, improving margins and a detailed review of SG&A costs.
Aesop had a good quarter, with net sales up 24.5% and all markets posting double-digit growth.
“During my first weeks as CEO of the group, I have focused mainly on two priorities: the first is to rethink the organizational structure of Natura &Co to make it leaner and lighter,” said Fabio Barbosa, CEO of the Natura & Co group. “At this stage, we have mapped significant savings at the holding level. If the company had implemented these changes last year, the impact would have been an annualized reduction of at least 40% in the company’s recurring expenses. Further changes and estimated savings will be announced at a later date. The second is a review of the governance model and modes of operation within Natura &Co, with the holding company focusing heavily on defining key performance indicators, tracking and monitoring the performance of more autonomous brands, steering the allocation of resources within the group and the continued promotion of our 2030 commitment to the vision of sustainability of life. We are convinced that a leaner and more agile structure, built on a solid foundation of accountability for results, will enable business units to respond with agility to their current strategic and market challenges. At the same time, we are strongly focused on improving the fundamentals of our underperforming businesses, which we see as our main challenge and main driver of growth. Although we expect revenue from our businesses to improve in the second half of the year, we believe challenges in the macroeconomic environment will persist and our margins will remain under pressure in the near term. In this context, our clear and immediate priority is to focus on margins and operating cash flow, and the teams of all our brands and activities are mobilized and incentivized on these clear objectives.
The Group ended the quarter with net cash of $824.3 million.