Natura reported first-quarter results that disappointed investors, with restructuring costs still weighing on the market and the consumer market proving challenging in Brazil and Argentina .
The company closed the first three months of the year with a net loss of R$ 445 million, almost nine times greater than the loss of R$ 50 million from continuing operations in the same period of the previous year. Revenue fell 7.7% to R$ 4.7 billion, while EBITDA totaled R$ 346 million, a 47% decrease, with the margin falling 5.3 percentage points to 7.3%.
At around 1:21 PM, Natura's shares were down 4.67%, at R$ 10.01. Year-to-date, the shares are up 39%, bringing the market value to R$ 13.7 billion.
Despite the weak results, Natura's management is confident about the year. Unable to count on a recovery in consumption in key markets, executives say that results should benefit from adjustments made to operations , with the bulk of the measures now behind them.
“We have practically completed more than 75% of the reorganization [reduction of positions foreseen in the new operational model], so the costs associated with the reorganization will fall considerably from now on,” said João Paulo Ferreira, CEO of Natura, in a press conference on Tuesday, May 12. “Likewise, the capture of benefits should accelerate from the second quarter onwards.”
In its financial report, Natura indicates that the company recorded a pressure of R$ 221 million related to terminations and other extraordinary expenses from the restructuring.
According to Silvia Vilas Boas, CFO of Natura, with a large portion of the terminations occurring in the first quarter, the company should demonstrate a return to profitability, with the remaining 25% to be completed in the coming quarters.
She stated that, were it not for these costs, the situation in the first quarter would have been better, a sign that the turnaround is already having positive effects on the company.
“We closed the quarter with a return on equity of 7.3%, heavily impacted by these extraordinary non-recurring expenses,” he said. “If we excluded this effect, which is not going to continue to recur, our return on equity would have been 12%.”
Ferreira also highlighted that, if restructuring costs and payments related to the closure of the holding company and the Chapman case are disregarded – the company reached a US$67 million settlement in the United States in February to end a lawsuit related to Avon 's talc – cash generation would have been neutral, in a quarter in which consumption normally occurs.
In the first quarter, free cash flow from continuing operations was negative R$430 million, an increase compared to the consumption of R$168 million recorded in the first quarter of 2025.
These factors also weighed on Natura's financial leverage, which increased 0.54 times compared to the previous quarter, reaching 2.11 times. Vilas Boas expects a reduction, bringing it within what the company considers optimal: leverage between 1 and 1.5 times by the end of the year.
With a leaner structure, but still with strict expense control, Natura believes it can get through the year, which should help it overcome a weaker consumer market.
On the commercial front, Ferreira said that Natura will focus on recovering sales in the Northeast and investing in more prosperous categories, such as body splash . "Our strategies are focused on identifying areas of greater consumer interest and where we can be more competitive," he said.
Despite highlighting that the adjustments are behind them, Natura executives warned that a systems migration planned for the second quarter could negatively impact results if it goes wrong. The replacement will occur in factory operations and the supply center.
“We will be implementing an SAP system in the industrial area here in Brazil, and this may cause some disruption. We are very well prepared technically, our readiness is high, but there can always be some turbulence,” he said. “I hope to see no interruptions.”
