Potential Divestment as Sales Fall and Losses Widen
- Natura & Co considering separating Avon due to widened losses
- Net loss increased by 43.3% in Q1 compared to the previous year
- Sales fell by 5.7% to BRL6.1bn (£937m)
- Avon International sales down by 13.1% to BRL1.3bn (£214m)
- Productivity at Avon improved but offset by reduced representative activity
- CEO Fábio Barbosa discusses potential separation of Avon
Brazilian cosmetics giant Natura & Co is considering separating its struggling Avon division after reporting widened losses in the first quarter of trading. The company’s net loss increased by 43.3% to BRL934.9m (£143.6m), up from a loss of BRL652m (£100m) in the previous year, while sales fell by 5.7% to BRL6.1bn (£937m. Avon International’s sales dropped by 13.1% to BRL1.3bn (£214m), or 4.7% on a constant currency basis. Despite improved productivity at Avon, this was more than offset by reduced representative activity and weaker promotional execution. CEO Fábio Barbosa said the company is focusing on simplifying the market, concentrating on key countries, and enhancing portfolio promotion to stabilize revenues and improve profitability.
Factuality Level: 8
Factuality Justification: The article provides accurate information about Natura and Co’s financial performance and its plans for Avon International, with quotes from the CEO providing context and insight into the company’s strategy.
Noise Level: 3
Noise Justification: The article provides relevant information about Natura and Co’s financial performance and its plans for Avon International, with quotes from the CEO providing insight into their strategies and ongoing exploration of a potential separation. It does not contain any irrelevant or misleading information, and stays on topic without diving into unrelated territories.
Financial Relevance: Yes
Financial Markets Impacted: Natura and Co’s stock price may be impacted by the news of a potential separation of Avon
Financial Rating Justification: The article discusses Natura and Co’s financial performance, including losses and sales declines, and mentions a potential separation of Avon, which could affect the company’s structure and operations. This information is relevant to investors and financial markets as it may impact the company’s stock price and overall market sentiment.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.
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