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Natura Q2 Profit Plunges 92% as Financial Expenses Weigh on Earnings

Natura Q2 Profit Plunges 92% as Financial Expenses Weigh on Earnings. Source: Image by Steinar Hovland from Pixabay

Brazilian cosmetics giant Natura reported a sharp decline in second-quarter profit as higher financial expenses, currency movements and derivatives weighed on its bottom line, despite core earnings coming in above market expectations.

Natura posted a recurring net profit of 35 million reais ($6.85 million) for the April-June quarter, representing a 92.1% drop from the same period in 2025. The Brazilian beauty and personal care company attributed much of the decline to increased net financial expenses, including the impact of foreign exchange movements and derivatives.

The company's earnings before interest, taxes, depreciation and amortization (EBITDA) reached 620 million reais in the second quarter, down roughly 6% year-on-year. Nevertheless, the result exceeded the 528 million reais forecast by analysts surveyed by LSEG, suggesting Natura's underlying operating performance remained stronger than expected despite challenging market conditions.

Natura's Brazilian business faced additional pressure during the quarter, with both revenue and EBITDA margin affected. The company cited product unavailability, unfavorable macroeconomic conditions and a temporary tax mismatch as key factors behind the weaker performance in its home market.

Second-quarter net revenue fell 9.1% from a year earlier to 5.17 billion reais ($1.01 billion). The figure was broadly in line with market expectations and slightly exceeded the 5.15 billion reais projected by analysts.

The latest Natura earnings report highlights a mixed quarter for the Brazilian cosmetics maker. While EBITDA surpassed analyst estimates, the steep decline in recurring net profit and weaker revenue underscore the financial and operational challenges facing the company.

Investors are likely to focus on whether Natura can improve product availability, restore margins in Brazil and limit the impact of financial expenses in the coming quarters. Progress in its domestic operations could prove important for the company's earnings outlook as it navigates persistent macroeconomic pressures.

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