Natura &Co Streamlines Operations with U.S. Settlement and Russian Exit

Natura &Co finalizes its strategic refocus by settling a $68.8M US talc lawsuit and selling its Russian business, aiming to boost profitability in core Latin American markets.

Brazilian cosmetics group Natura &Co is advancing its strategic overhaul by resolving a major U.S. lawsuit and finalizing its departure from Russia. These decisive moves allow the company to draw a line under legacy issues and sharpen its focus exclusively on its core Latin American operations. The central question for investors is whether this radical simplification will be sufficient to drive a sustainable improvement in profitability.

Strategic Refocus Takes Shape

The company's recent actions are part of a comprehensive restructuring plan. Having already terminated its NYSE listing in 2024 to simplify administration, Natura &Co shares now trade over-the-counter at approximately $5.66. Management is currently preparing for the planned relaunch of the Avon brand in the first half of 2026, which is intended to lay the groundwork for targeted margin expansion.

Despite a challenging macroeconomic climate and pressure on regional revenues, the primary objective for the current fiscal year is to widen the EBITDA margin. By divesting non-core operations and settling costly legal disputes, the firm aims to create a significantly leaner and more efficient organizational structure.

Closure on Costly U.S. Litigation

Natura &Co has reached a settlement to end protracted legal proceedings in the United States. The allegations concerned asbestos-containing talc products from its Avon subsidiary. To resolve the matter, the conglomerate has agreed to a payment of roughly $68.8 million, scheduled for March 6.

The actual financial impact on the company will be less severe. A compensatory payment of $22 million will significantly cushion the cash outflow. This agreement removes a substantial legal obstacle that had weighed on the balance sheet for an extended period.

Finalizing the Russian Withdrawal

In a parallel development, Natura has officially completed the sale of its Russian business. The Arnest Group acquired Avon's Russian operations for about $31 million, with the transaction finalized last Friday.

This step marks a definitive break for the direct-selling organization. Following the earlier sale of its businesses in Europe, Africa, and Asia to Regent LP, the Russian assets were the last remaining operational holdings outside Latin America. While Natura &Co retains global ownership of the Avon brand rights, it has now decisively restricted its own operational activities to its home markets in Latin America.