Natura (B3: NATU3) released its second-quarter 2026 results on Monday. Revenue reached BRL 5.2 billion amid operational challenges in Brazil, while Hispanic markets delivered solid growth.
Brazil faced pressure from product unavailability, temporary tax mismatches, and a weak consumption environment.
Hispanic America grew 7.2% in constant currency. Mexico showed consistent progress, and Argentina continued its recovery. The Natura brand rose 12.3% in the region, while Avon grew 4.7%. Both brands improved revenue and profitability under the company’s new operating model.
Consolidated EBITDA stood at BRL 620 million, with a 12% margin. This marked a sequential improvement of 470 basis points. Excluding the temporary tax impact, the margin reached 13.2%.
Hispanic markets delivered a 7.6% EBITDA margin, up 220 basis points year-over-year. Brazil’s margin was 16.4%, affected by a temporary tax effect in São Paulo and higher selling expenses.
Free cash flow to firm remained positive at BRL 342 million. Leverage edged down slightly to 2.06x, supporting the company’s financial health.
Natura is implementing logistical and commercial adjustments across all channels to boost Brazil revenue in the second half of 2026. Key steps include:
CEO João Paulo Ferreira said the operational challenges stemmed from necessary adjustments to support future growth. These include investments in digital and logistics capabilities, plus better alignment across direct sales, online, and franchise channels. Product shortages were larger than initially expected.
Natura will continue strategic investments in marketing, R&D, and digital innovation. The company still expects reported margin expansion compared with 2025’s 10.0% level, though it no longer guides for the previous adjusted margin of 14.1%.
Management reaffirmed that free cash flow to firm should exceed the prior year, with leverage remaining in the optimal range.
Ferreira noted that the fundamental business thesis remains unchanged. Natura relies on strong brands, a unique distribution model in high-potential markets, and a committed team focused on consistent growth, high margins, and strong returns.
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