In the second quarter of 2026 (2Q26), Arezzo (AZZA3) reported recurring net income of R$ 106.5 million, a 62.5% drop compared to 2Q25, with a net margin of 4.0%. In the period, gross revenue totaled R$ 3.4 billion, down 7.4% year over year, while recurring EBITDA (earnings before interest, taxes, depreciation and amortization) came to R$ 379.6 million, a 29.1% decline, with a 14.2% margin.
Gross revenue from continuing brands came to R$ 3.35 billion, 7.1% lower than a year earlier, mainly impacted by a 13.6% decrease in sell-in channels. Net revenue reached R$ 2.664 billion, an 8.2% reduction on the same comparison basis, and gross profit was R$ 1,524.7 billion, a 5.9% contraction, with a 1.3 percentage point expansion in gross margin, to 57.2%.
In the first half of 2026 (1H26), Arezzo posted recurring net income of R$ 170.4 million, down 57.5% versus 1H25, with a 3.3% margin. Gross revenue in the half-year totaled R$ 6.47 billion, a 6.7% decline, while recurring EBITDA was R$ 708.1 million, a 26.5% drop, with a 13.8% margin.
The company highlighted operating cash generation of R$ 356.5 million in 2Q26, more than three times the amount in 2Q25, with conversion of 115% of recurring pre-IFRS EBITDA into operating cash and 90% after investments (capex). In 1H26, operating cash generation was R$ 504.3 million, compared to R$ 55.7 million in the same period of 2025, and the cash conversion cycle closed the quarter at 93 days, a reduction of 31 days in relation to 2Q25.
At the end of June 2026, Arezzo had net debt of R$ 2,127.2 million, down R$ 39.9 million from the previous quarter. Leverage, measured by the ratio of net debt to recurring EBITDA for the last 12 months (pre-IFRS 16), stood at 1.52x, with 82.3% of the debt concentrated in the long term. In the quarter, capex was R$ 76.4 million, an 18.9% reduction versus 2Q25.
