NATU3 after 2Q26: Brazil revenue −9% as Hispanic growth and a R$320m financial bridge reshape net income

On 10 August 2026, Natura &Co (B3: NATU3) released 2Q26 results for the period ended 30 June 2026. Net revenue was R$ 5.17 billion (−9.1% year on year, −7.1% in constant currency). Consolidated EBITDA reached R$ 620 million at a 12.0% margin — 13.2% excluding a temporary ICMS substitution-tax (ST) mismatch in São Paulo — with management citing +470 basis points of sequential margin improvement versus 1Q26. Net income from continuing operations was only R$ 35 million, down from R$ 446 million in 2Q25, even though free cash flow to the firm stayed positive at R$ 342 million and leverage eased slightly to 2.06× net debt over LTM EBITDA.

The educational frame is geography plus profit quality. Hispanic America accelerated (+7.2% revenue in constant currency; 7.6% EBITDA margin, +220 bps YoY) while Brazil absorbed product shortages, consultant-activity pressure, and tax-line noise. Readers who followed ASAI3's traffic-versus-margin split or LREN3's guidance reset will recognize the same consumer backdrop: volume and share stories in one channel do not guarantee consolidated earnings growth when another region or a financial line moves against you.

Consolidated snapshot

Management had pre-warned in early July 2026 that internal logistics and channel realignment would weigh on quarterly revenue; the release reiterated supply-chain rebalancing, consultant incentives, franchise formats, and the “Minha Loja” digital store as 2H26 fixes — all forward-looking and worth tracking in the next ITR, not treated as delivered outcomes in this quarter.

Brazil: availability, tax timing, and selling deleverage

Brazilian performance dominated the consolidated decline:

The ICMS-ST item is a timing/classification mismatch between cost and revenue lines in São Paulo — not operating margin expansion. That is why management highlights 13.2% consolidated EBITDA margin excluding the mismatch, versus 12.0% reported.

On the direct-selling model, lower revenue with fixed commercial costs shows up as negative operating leverage on selling expenses — separate from gross margin on product mix. CEO João Paulo Ferreira framed the quarter as necessary adjustment (digital, logistics, alignment among direct sales, e-commerce, and franchises) with shortages worse than initially expected — an operational narrative investors should cross-check against inventory and consultant-activity metrics in the CVM filing.

Hispanic America: growth engine and mix shift

In contrast, Hispanic markets posted:

Mexico and Argentina recovery, plus efficiencies from the new operating model, lifted both revenue and profitability. Because Hispanic margins are lower than Brazil's in the mix, consolidated gross margin can face ~20 bps of pressure when Hispana grows faster — a mechanical mix effect management called out on the earnings call.

EBITDA: sequential repair, annual comparison still messy

R$ 620 million of EBITDA at 12.0% margin is a sequential story (+470 bps vs 1Q26 in company materials) more than a clean YoY win:

• Ex-tax-mismatch margin 13.2% helps isolate operations from São Paulo ST noise.
• Severance tied to reorganization cost about 40 bps of margin year on year on management's bridge.
• Selling deleverage in Brazil added about 20 bps of margin pressure.
• Hispanic mix added about 20 bps of gross-margin pressure at consolidated level.

For quarter-on-quarter readers, the lesson is: margin recovered from 1Q26 lows; for year-on-year readers, Brazil revenue still overwhelmed Hispana's growth.

Net income: the R$410 million gap is mostly financial

Reported net income of R$ 35 million is not a scaled-down version of EBITDA. Management's ~R$ 410 million year-over-year decline breaks roughly as follows:

~78% of the profit drop sits in financial lines, not in EBITDA. That does not make derivatives immaterial for risk management — it means recurring operating profit and headline net income diverged sharply this quarter. Compare to PSSA3, where credit losses flattened group ROAE while insurance looked strong: here, treasury and hedge accounting flatten net income while EBITDA still prints R$ 620 million.

Cash flow and leverage: working capital as a partial offset

Despite R$ 35 million of net income, firm free cash flow was R$ 342 million:

Net debt fell R$ 179 million quarter on quarter to R$ 3.9 billion, with leverage at 2.06×. The debt bridge also included ~R$ 160 million from FIDC senior units (April 2026 transaction), ~R$ 32 million from BRL appreciation on USD debt principal, ~R$ 37 million of share repurchases, and ~R$ 318 million out for interest and derivative settlements.

Positive FCF with collapsing net income is coherent when revenue misses release working capital — but that release is partly cyclical (lower sales → lower receivables/inventory), not necessarily structural efficiency.

Guidance and what to watch in 2H26

In the August 2026 release, Natura:

• Maintained expectation of reported margin expansion versus 2025 (10.0% full-year base).
• Dropped explicit guidance for the adjusted margin level previously referenced (14.1%).
• Reaffirmed FCF to firm above the prior year and leverage within its stated optimal range.
• Committed to continued marketing, R&D, and digital spend — so margin recovery is not framed as an austerity-only path.

Operational KPIs to monitor in the next filing: Brazil Natura revenue trend after supply fixes, consultant activity, Hispanic margin sustainability, and whether financial expense normalizes after derivative settlements.

How to read the next filing

1. Split Brazil vs Hispanic before extrapolating consolidated revenue — −9% group growth is a Brazil story.
2. Use EBITDA ex ICMS-ST mismatch for operating comparisons; keep reported margin for covenant and headline tracking.
3. Reconcile EBITDA to net income through the financial result — one-off derivative and FX bases can dominate the bottom line.
4. Treat FCF alongside working-capital lines — a revenue miss can inflate short-term cash conversion.
5. For peer Brazil consumption context, see ABEV3 organic vs reported and ASAI3 traffic.

Where to see this on the explorer

• NATU3 company page
• Blog index

Sources

• Natura &Co — 2Q26 earnings release and investor presentation for the period ended 30 June 2026, disclosed 10 August 2026 (CVM)
• Natura RI — 2Q26 results news release (10 August 2026)
• Public Q2 2026 earnings call materials (August 2026)
• NATU3 on the explorer

Disclaimer

This article is for informational and educational purposes only. It is not investment advice. EBITDA adjustments, regional splits, and leverage metrics follow Natura's earnings materials and may differ from statutory IFRS lines in CVM filings. Direct-selling revenue, tax timing, derivatives, and working-capital swings can move quarter-to-quarter results materially. Refer to official documents and, if needed, a licensed professional.