Earnings call transcript: Portobello Group lifts margins in Q2 2026 as debt worries linger

Portobello Group reported flat revenue for Q2 2026 compared to the previous year, but experienced a 10% increase from Q1. Gross margins expanded to over 37% and EBITDA reached BRL 97 million. The company completed the sale of its Pointer business and continued to prioritize debt reduction and improving working capital. Despite investor concerns about leverage and weak market conditions, portobello shares fell just 2.08% to $1.41, suggesting the market may view the operating gains favorably.

Domestic ceramic demand in Brazil decreased 3.1%, while the U.S. market dropped about 12%. However, exports and a stronger product mix helped offset the declines and maintain revenue at a flat year-over-year level. Management emphasized their focus on profitability over top-line growth, with gross margin improvements and cost control contributing to the better-than-expected results.

The company expects to maintain gross margins above 37% in the second half of 2026, with Portobello America aiming for an 18% gross margin as it shifts to local production and better product mix. Management also mentioned exploring additional asset monetization options, such as real estate recycling and franchise conversions, as part of its deleveraging plan.