SAO PAULO (Reuters) - Brazilian cosmetics maker Natura said on Thursday it has agreed to sell its Avon International unit to holding firm Regent, ending a long period of uncertainty after announcing last year it was weighing alternatives for the business arm. The sale of the unit, which aggregates Avon's businesses outside Natura's key Latin American market, sent Sao Paulo-traded shares in the company up more than 13%. Natura has been carrying out divestitures as part of a broader strategy to simplify it ...

Financial Data and Key Metrics Changes - Q2 net sales were $424.4 million, down 4.5% year-over-year, with base business down 4.2% [6][17] - Q2 adjusted EBITDA was $58 million, a decrease of $5 million or 9.3% compared to last year [6][16] - Adjusted EBITDA as a percentage of net sales was 13.7% for the 2025 fiscal year [16][27] - Adjusted net income was $2.9 million or $0.04 per adjusted diluted share, down from $6.6 million or $0.08 per adjusted diluted share in the previous year [27] Business Line Data and Key Metrics Changes - The frozen and vegetables business unit saw a segment adjusted EBITDA decline of $6.5 million due to higher costs and trade spend [6][7] - The specialty business unit experienced an 8% decline in net sales, primarily due to lower Crisco oil pricing, but segment adjusted EBITDA improved by 3% [7][18] - Meals segment net sales declined by $3.8 million or 3.5%, but adjusted EBITDA increased by $1.8 million or 7.7% [18] - Spices and Flavor Solutions saw a slight decline in net sales of less than $2 million, with commodity costs increasing [21][22] Market Data and Key Metrics Changes - The U.S. frozen vegetables business is expected to turn profitable with an increase in segment adjusted EBITDA of $8 million to $10 million compared to last year [13] - Negative foreign exchange impacts have moderated, and a better cost environment is anticipated for the frozen and vegetables business unit [20][25] - Approximately 90% of net sales are to U.S. customers, with 80% to 85% of products sourced from the U.S., Canada, and Mexico [35] Company Strategy and Development Direction - The company aims to achieve adjusted EBITDA as a percentage of net sales approaching 20%, reduce leverage closer to five times, and improve cash flow generation [8][15] - Recent divestitures are part of a strategy to reshape the portfolio for higher margins and cash flows [10][30] - The company is committed to reducing net debt and leverage ratio over the next twelve months [36] Management's Comments on Operating Environment and Future Outlook - Management expects solid improvement in the second half of fiscal year 2025, with flat to slightly positive net sales and year-over-year growth in adjusted EBITDA [11][12] - The company anticipates a modestly softer economic environment impacting consumer spending patterns [33] - Management is optimistic about stabilizing top-line performance and managing input costs effectively [34] Other Important Information - Selling, general, and administrative expenses increased by 9.4% to $47.2 million, reflecting higher consumer marketing expenses [26] - The company generated $17.8 million in net cash from operations during Q2 2025, compared to $11.3 million in Q2 2024 [28] - The company expects to reduce pro forma net leverage ratio to less than six times by the end of the next year [36] Q&A Session Summary Question: What is the expected organic sales interpretation for the second half? - Management indicated that base business net sales are projected to be down about 1% to 2% after accounting for the 53rd week benefit [39][40] Question: How are retailers responding to pricing actions related to tariffs? - Management noted that most tariff exposure is in spices and flavor solutions, and they expect to implement pricing actions to recover tariff costs [48][50] Question: What is the EBITDA for the divested brands? - Management did not disclose EBITDA for the divested brands, as it is a sale to a private company [55] Question: What is the current leverage ratio and availability on the cash flow revolver? - The leverage ratio is approximately 6.8 times, providing a cushion of about 0.7 turns [60] Question: Are there any changes in sourcing to mitigate spice and seasoning tariffs? - Management is exploring alternative sourcing but noted that most spices are sourced from countries already subject to tariffs [66]

Financial Data and Key Metrics Changes - First quarter 2025 revenue was $12.3 million, down from $15.5 million in the first quarter of 2024, primarily due to the sale of Nine Times Square in Q4 2024 [10] - GAAP net loss attributable to common stockholders was $8.6 million in Q1 2025, compared to a net loss of $7.6 million in Q1 2024 [10] - Adjusted EBITDA for Q1 2025 was negative $800,000, down from $2.9 million in Q1 2024 [10] - Cash net operating income was $4.2 million in Q1 2025, compared to $7 million in Q1 2024 [10] - At quarter end, net leverage was approximately 58%, with a weighted average interest rate of 4.4% and a weighted average debt maturity of 2.3 years [11] Business Line Data and Key Metrics Changes - The company focused on leasing available space and extending leases, achieving 120 basis points of occupancy growth to 82% compared to the previous quarter [6] - The portfolio's weighted average remaining lease term was 5.4 years, with 51% of leases extending beyond February 2030 [8] Market Data and Key Metrics Changes - The real estate portfolio is valued at $488 million, primarily located in Manhattan, consisting of six office and retail properties [8] - The tenant base includes large investment-grade firms, with 77% of the top 10 tenants being investment grade or implied investment grade [8] Company Strategy and Development Direction - The company is actively marketing 123 William Street and 196 Orchard for sale to unlock value and diversify holdings [7] - Proceeds from sales will be used to retire debt and invest in higher-yielding assets, aimed at increasing long-term value [7] - The strategy includes divesting select Manhattan assets to reduce leverage and pursue more profitable ventures [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the leasing pipeline and expects to close additional leasing and renewals in Q2 2025 [6] - The divestiture of certain Manhattan assets is anticipated to generate significant cash and decrease leverage, which is vital for expanding into new opportunities [12] Other Important Information - The company will hold its virtual annual meeting of shareholders on May 29, 2025 [4] Q&A Session Summary - No specific questions and answers were provided in the content.