Azzas 2154 reports Q2 drop in revenue and profit

Last week, Brazilian holding company Azzas 2154 presented its results for the second quarter of 2026. Gross revenue fell by 7.1 percent to 3.4 billion reais (656.5 million dollars) compared to the second quarter of last year. This was “mainly impacted by a 13.6 percent drop in sell-in channels.” Gross profit, at 1.5 billion reais, saw a 5.9 percent decrease compared to the same period in 2025.

Net revenue for these three months was 2.66 billion reais, a decrease of 8.2 percent compared to the same period in 2025. Net profit saw a significant drop of 62.5 percent, reaching 106.5 million reais.

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) reached 379.6 million reais, a 29.1 percent decline from Q2 2025. The EBITDA margin was 14.2 percent, down 4.3 percentage points, due to operational deleveraging.

In the management's message, the company stated that “the quarter's results, however, did not reflect the potential of our brands”.

Sales decline and stock adjustments

According to the holding company, which owns the brands Farm Rio, Hering, Arezzo, Schutz, Anacapri, Brizza, Alexandre Birman, Animale, Maria Filó, Carol Bassi and Reserva, the results are a reflection of stock level adjustments in the franchise network. These adjustments, particularly for Arezzo and Hering, have now been completed. A decrease in sales to franchise channels, multi-brand stores and e-commerce was also cited.

However, the company presented positive points such as the generation of operating cash flow, which was 356.5 million reais. This surpassed the operating cash flow generated in the same period of 2025 by 3.4 times.

“We ended the first half of the year with a clear view of the challenges and priorities for the second half. We have a portfolio of relevant brands; signs of resilience in final consumption; and concrete progress in stock, working capital and cash generation. At the same time, we recognise the need to evolve in resuming growth and, above all, in recovering profitability. We remain focused on execution, with a sense of urgency and discipline. Our priority is to transform the strength and relevance of our brands into sustainable growth, improved results and consistent long-term value generation for our shareholders,” concluded the message to the market.

Speculation about Farm Rio

The possible sale of Farm Rio, reported in mid-June, was addressed during the results conference call. Azzas 2154's response was the same as the one it gave in a material fact in July: “we have hired Morgan Stanley to advise on the evaluation of strategic alternatives involving Farm Rio, with the aim of unlocking the brand's value. The process is proceeding within the expected timeframe and according to the planned schedule, with no decision taken, operation approved or structure defined to date.”