Natura’s Q2 profit plunges 92% as Brazil weighs on growth

Natura’s 2026 Q2 results show accelerated growth in Hispanic markets, while Brazil performed poorly. The company cites product availability issues, a temporary tax discrepancy, and slowed consumption as factors weighing on its Brazilian operations. Natura also attributed the sharp decline in net income to higher net expenses, such as currency and derivatives effects.

The Brazilian multinational cosmetics and personal care company reports a net income of R$35 million (US$6.78 million), compared with R$446 million (US$86.43 million) on a comparable basis in Q2 2025. Reuters characterized this as a 92.1% year-over-year decline on a recurring basis.

Natura reports a total revenue of R$5.2 billion (US$1.01 billion) in Q2. Additionally, its consolidated EBITDA cashed in at R$620 million (US$120.15 million), with a 12% margin. This figure is up by 470 bps sequentially.

“The operational challenges in the quarter stemmed from necessary adjustments to pave the way for future business growth, such as investments in digital and logistics capabilities and the realignment among direct sales, online, and franchise channels, although product shortages were greater than initially anticipated,” says Natura CEO, João Paulo Ferreira.

Dips and troughs

The financial report reflects significant pockets of challenges alongside areas of growth. Natura reports accelerated growth of 7.2% in constant currency and higher

Product shortages and softer consumption weighed on Natura’s Brazilian business.

The company also states that the Natura brand grew by 12.3% and Avon by 4.7% in the region. Natura is the parent company of Avon Latin America and completed the sale of Avon International to Regent LP in January 2026.

While the results show apparent pressure on the company, they exceeded adjusted EBITDA expectations. Adjusted EBITDA fell around 6% to R$620 million (US$120 million); however, according to Reuters, the figure was still above the R$528 million (US$102.3 million) expected by analysts surveyed by the London Stock Exchange Group.

Net revenue dropped 9.1% to R$5.17 billion (US$1 billion), broadly in line with analyst expectations of R$5.15 billion (US$1 billion). Revenue in the company’s primary market, Brazil, dropped 14.8% year-on-year.

Natura has been following a strategy of restructuring to focus on growth and sustainability in Latin American markets and scaling back in the US. Earlier this year, the company shut down its US operations and closed its subscription program.

Looking ahead

Mexico and Argentina helped drive growth across Hispanic America.

In its statement regarding future growth, Natura outlined actions to address the operational challenges experienced in Q2. The company is undertaking initiatives to rebalance the supply chain in H2 of 2026, aims to accelerate store openings, and mentions a new franchise agreement model.

The report states that Natura will continue to make investments in marketing, R&D, and digital innovation. The company also maintains its expectation of margin expansion relative to 2025 for the reported margin of 10%, but no longer for the adjusted margin of 14.1%.

Ferreira expresses optimism in the coming half of 2026: “We have a business built on strong brands, distributed through a unique model in high-potential markets, and backed by a committed, innovative, and execution-driven team. This is a powerful combination designed to deliver consistent financial growth, high margins, and strong returns,” he concludes.