Natura Cosmeticos SA: 1Q26 – Brazil soft, Avon struggles, heavy charges ahead of G&A savings

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Natura Cosmeticos SA: 1Q26 – Brazil soft, Avon struggles, heavy charges ahead of G&A savings

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Natura Cosmeticos SA

1Q26 – Brazil soft, Avon struggles, heavy

charges ahead of G&A savings

Reiterate Rating: BUY | PO: 14.00 BRL | Price: 10.50 BRL

Revenue -7.7%, EBITDA -47%, charges & FX drive loss 11 May 2026

NATU reported an unexpected net loss of R$0.32/share vs consensus EPS of R$0.02, on Equity

weaker margins and FX losses. Net revenue fell 3.7% ex FX, on soft demand in Brazil

(revenue -5.5%), and a challenging Wave 2 rollout in Argentina (Hispanic -1.1% ex FX).

Operating deleverage and R$221mn in severance and other expenses drove a 46.8% Robert E. Ford Aguilar, CFA Research Analyst

EBITDA contraction. Ex charges, EBITDA declined 27.3% (margin -322bp). FCF of - BofAS

R$430mn reflected operating weakness, severance and Avon litigation settlement costs. +1robert.e.ford@bofa.com646 855 5439

Challenging Brazil, Avon continues to struggle MelissaResearchByun,AnalystCFA

Brazil was hit by soft Natura sales (-3.0%), particularly in the Northeast, and ongoing BofAS+1 646 855 3177

weakness at Avon (Beauty -13.8%, H&S -10.8%). Natura sellout growth reportedly melissa.byun@bofa.com

outperformed the market. Brazil’s average consultant base contracted 4.2% y/y, despite Gustavo Fratini >>

efforts to incentivize frequency and improve commissions, reflecting some migration to ResearchMerrill LynchAnalyst(Brazil)

digital channels (+23.6%, or 9.0% of revenue). Promotional activities (gross margin - +55 11 2188 4541

gustavo.fratini@bofa.com

140bp y/y), operating deleverage, health costs and prior-year tax credits drove a 30%

Wellington Santana >>

EBITDA contraction and 581bp margin decline ex 1x to 16.6% (reported EBITDA -36.2%). Research Analyst

Merrill Lynch (Brazil)