In its earnings release for the second quarter of 2026 (2Q-26), Natura (NATU3) reported net income of R$ 35 million, compared to R$ 446 million from continuing operations in the same period of 2025. The Natura Group’s consolidated net revenue totaled R$ 5.170 billion in 2Q-26, down 9.1% year over year, while EBITDA (earnings before interest, taxes, depreciation and amortization) reached R$ 620 million, with a margin of 12.0% or 13.2% when excluding the effect of a temporary tax mismatch.
According to the report, the revenue contraction mainly reflected weaker performance in Brazil, where net revenue fell 14.8% year over year, affected by significant product unavailability, an adverse macroeconomic environment, and the impact of changes in the ICMS-ST tax regime in São Paulo, which reduced revenue by around 2 percentage points in the quarter. In Hispanic markets, revenue was virtually flat in reais (+0.7%), but grew 7.2% in constant currency, with an acceleration of growth in Mexico and a gradual recovery in Argentina.
The Natura Group’s consolidated gross margin stood at 65.7% in 2Q-26, a decline of 70 basis points compared to 2Q-25, influenced by the tax effect in Brazil and continued margin pressure in Argentina, partially offset by gains in Mexico. Selling expenses fell 2.4% year over year but increased 310 basis points as a percentage of net revenue due to operating deleverage in Brazil. General and administrative expenses dropped 18.0% year over year, an improvement of 160 basis points as a share of net revenue, reflecting the initial efficiency gains from the new operating model.
Net financial result was negative R$ 297 million in 2Q-26, versus a positive result of R$ 23 million in the same quarter of 2025, a deterioration of R$ 320 million explained mainly by negative financial foreign exchange variation of R$ 114 million and by the costs of settling derivatives linked to dollar-denominated bonds. Financial expenses totaled R$ 227 million, with interest on debt of R$ 127 million, while financial income came to R$ 32 million, including a 0.9% yield in the quarter on cash and equivalents of R$ 2.4 billion.
Free cash flow from continuing operations was neutral in 2Q-26, compared to generation of R$ 159 million in 2Q-25, while free cash flow to the firm (FCFF) was positive at R$ 342 million, a slight year-over-year decrease of R$ 23 million. Net debt ended the quarter at R$ 3.864 billion, down R$ 179 million versus 1Q-26, and the leverage ratio, including IFRS 16 effects, stood at 2.06 times net debt/EBITDA, slightly below the level seen in the previous quarter.
