Natura Q2 Net Income Slumps 82% to US$6.9 Million on Brazil Woes
Brazil · Business
Key Facts
- —Net income R$35 million (US$6.9 million), down 82% y/y
- —Net revenue R$5.17 billion (US$1.01 billion), down 9.1%
- —EBITDA R$620 million (US$122 million), down ~6%
- —Brazil pressure operational issues, tax mismatch, product unavailability
- —Hispanic growth +7.2% constant-currency revenue growth
- —Financial expenses higher, driven by currency and derivatives
- —Report date August 10, 2026, by Reuters and others
The Brazilian cosmetics giant’s profit took a sharp hit, dragged down by higher financial costs and operational troubles in its home market.
Natura Q2 net income plunged 82% to R$35 million (US$6.9 million), the company said on August 10, 2026.
Natura Q2 net income drops sharply
Brazilian cosmetics maker Natura & Co (B3: NATU3) posted net income of R$35 million (US$6.9 million) for the second quarter of 2026. That is down 82% from R$196 million a year earlier.
Revenue for the quarter was R$5.17 billion (US$1.01 billion), a 9.1% decline year over year, the company said. EBITDA, a measure of operating profit, came in at R$620 million (US$122 million).
Down about 6% from the previous year, according to company figures. The results reflect a challenging quarter for the company, which has been navigating a complex operating environment in its largest market.
Natura’s shares have been sensitive to earnings performance, and the release came after market close on Monday, August 10, 2026. The company’s net income figure includes non-controlling interests and minority stakes, which can affect the attributable profit.
Natura’s earnings per share for the quarter were not disclosed in the release. But the sharp decline in profit is expected to pressure investor sentiment.
The company’s balance sheet remains leveraged, though management has highlighted ongoing debt reduction efforts. Revenue declines were broad-based, but particularly pronounced in Brazil, which accounts for a majority of group sales.
The company’s digital and social selling channels continued to evolve, but the overall sales mix shifted in the quarter.
Brazil operations hurt results
Natura said the profit decline was mainly due to higher net financial expenses. Particularly currency and derivative effects, according to the earnings release.
Reuters reported that operational headwinds in Brazil, including product unavailability and a temporary tax mismatch, also pressured results. The company did not attribute the decline to a single factor, but highlighted the challenging macroeconomic environment in Brazil.
The tax mismatch likely relates to changes in tax credit rules or timing differences, which can affect net income. Product unavailability issues have been linked to supply chain disruptions and inventory management challenges in the domestic market.
These operational issues led to lost sales and increased costs, further compressing margins. The company has been working to resolve these issues, but the recovery may take several quarters.
Brazil’s retail sector has been under pressure from high interest rates and subdued consumer confidence, as noted by Cidade Marketing. Natura’s direct sales model is particularly sensitive to changes in consumer purchasing power and credit availability.
The company’s management has acknowledged the need to improve operational efficiency and product availability in Brazil.
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Hispanic markets show growth
Despite the overall decline, Natura’s Hispanic markets posted constant-currency revenue growth of 7.2%, with margin expansion, according to company reports and Reuters. This growth partially offset the weakness in Brazil, the company said.
The regional split underscores the contrasting performance between the domestic market and international operations. Hispanic markets include countries such as Mexico, Colombia, and Chile, where Natura has a strong presence.
The growth in these regions was attributed to better product acceptance and improved commercial execution. Margin expansion in Hispanic markets was driven by cost efficiencies and a favorable product mix.
The company’s international operations are seen as a key growth driver, though they remain smaller than the Brazil business. In contrast, the Brazilian market saw a revenue decline, which weighed on the group’s overall performance.
The success in Hispanic markets provides some cushion against the domestic downturn. However, currency volatility in these markets can offset operational gains, as seen in the financial expenses.
Analysts and market reaction
Several Brazilian outlets, including Exame and Money Times, reported the results on August 10–11, 2026, noting the profit fell 82%, below expectations. Investing.
com and Zonebourse also covered the earnings, with some outlets citing the 92.1% decline on a recurring basis, as per Reuters. The company’s stock and financial leverage were also mentioned, with ADVFN noting debt reduction and improved leverage.
The recurring net income decline of 92.1% is a more conservative measure that excludes non-recurring items. Analysts had expected a smaller profit decline, making the actual results a negative surprise.
The stock reaction was muted in early trading, but later sessions may reflect the earnings miss. ADVFN highlighted that the company’s leverage improved, which is a positive sign for balance sheet health.
Despite the profit drop, the company’s revenue decline was less severe than some peers, according to market observers. The coverage from multiple outlets indicates high investor interest in Natura’s performance.
The company’s management is expected to address these issues in a conference call with analysts.
Context and outlook
Natura’s results come amid a challenging retail environment in Brazil, with weak consumption affecting sales, as reported by Cidade Marketing. The company has not provided a full-year guidance, but the Q2 figures reflect ongoing pressures.
For investors, the sharp profit drop and revenue decline highlight the need to monitor Brazil’s recovery and currency fluctuations. The company’s diversified portfolio, including Avon’s operations, has not fully insulated it from domestic headwinds.
Natura has been investing in digital transformation and supply chain improvements to enhance competitiveness. The temporary tax mismatch is expected to resolve in the coming quarters, potentially providing relief to net income.
Currency effects, particularly the Brazilian real’s movements, will remain a key swing factor for financial expenses. Hispanic market growth could continue, but it may not fully compensate for Brazil’s weakness.
Natura’s management remains focused on cost control and margin protection, as evidenced by EBITDA resilience. The company’s overall strategy is to balance long-term growth with short-term financial discipline.
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Frequently Asked Questions
What was Natura’s Q2 2026 net income?
Natura reported net income of R$35 million (US$6.9 million) for Q2 2026. Down 82% from the same period last year, according to the company’s earnings release.
Why did Natura’s profit fall so sharply?
The decline was mainly due to higher net financial expenses, especially currency and derivative effects. As well as operational headwinds in Brazil, according to Natura and Reuters.
How did Natura’s revenue perform in Q2 2026?
Net revenue fell 9.1% year over year to R$5.17 billion (US$1.01 billion), according to the company.
Did Natura see any growth in Q2 2026?
Yes, Hispanic markets posted constant-currency revenue growth of 7.2%, with margin expansion, partially offsetting Brazil’s weakness, according to Reuters and company data.
Sources: Natura & Co Investor Relations, Reuters, Investing.com, Exame, Money Times, ADVFN, Zonebourse, Cidade Marketing, Brazil Stock Guide
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