Revenues and profits from sporting goods decreased sharply in the first quarter of 2015 at Alpargatas, the Brazilian company that owns the Havaianas and Dupé brands of rubber sandals. It is also a licensee of Mizuno and Timberland and the owner of two sports brands, Topper and Rainha.

The main reasons for the lower results in the sports segment were an apparent decline in Brazilian consumption of the most expensive sports shoes and an increase of 21.1 percent in the value of the dollar against the Brazilian real during the period.

The volume of sports shoes sold by the group in Brazil fell by 23.8 percent to 1.6 million pairs in the quarter. Adding sports apparel and work shoes, there was an even higher drop of 28.6 percent to 2.5 million pairs or units. The newly consolidated Osklen brand of surf-inspired clothing  had a 6 percent volume increase. Other product lines enjoyed a sales increase of 73.3 percent to 208,000 pairs or units.

Alpargatas' total domestic revenues were down by 1.5 percent to R$ 560.9 million (€163.8m-$185.9m) in the quarter, but they generated a slightly higher Ebitda margin of 12.9 percent. Sales of sporting goods and work shoes fell by 28.4 percent in value, in spite of a 4 percent boost in average selling prices for sports footwear, and represented 29 percent of the company's total domestic sales.

Alpargatas' total sales of sandals in Brazil fell by 3.8 percent to 48.0 million, with a drastic reduction in the number of lower-priced Dupé sandals sold, as their distribution was limited to the northern and northeastern regions of the country. Domestic sales of Havaianas sandals declined by 3.9 percent to 47.4 million pairs.

In contrast with the lackluster developments in Brazil, the international business of the group improved sharply in the quarter and represented 41 percent of its revenues and 55 percent of the consolidated operating profit before amortization (Ebitda).

In Argentina, where Alpargatas operates mainly through Topper, sales went up by 38.6 percent to R$197.5 million (€57.7m-$65.4m), with growth of 28.2 percent in constant currencies,.

The number of Havaianas shoes sold in other countries rose by 9.4 percent to 9.3 million pairs, but foreign deliveries of the lower-priced Dupé brand were reduced by more than 60 percent to about 600,000 pairs. Sales of sandals in these markets jumped by 18.2 percent to R$ 190.5 million (€55.6m-$63.1m), with increases in local currencies of 23.9 percent for Alpargatas USA and 9.9 percent for Alpargatas Europe, but the Ebitda margin on the international sandals business remained stable at 33.8 percent of sales.

Sales in Europe were supported by growth with key retail accounts in the U.K. and the establishment of direct distribution in the Benelux countries, Germany and Austria. To support Havaianas' growth in the continent, Alpargatas moved logistics to a bigger and more modern, automated distribution center in Marseilles, France.

Sales to foreign distributors jumped by 70 percent. The Havaianas collection was launched in China and the Dominican Republic.

The group's total revenues went up by 8.7 percent to R$ 948.9 million (€277.0m-$314.5m). The gross margin improved by 240 basis points to 44.6 percent, thanks in part to a drop in the cost of rubber of 20 percent in dollars and 5.4 percent in reais.  The cost of raw materials represented 55 percent of the cost product sold, direct labor costs 24 percent and general manufacturing expenses 21 percent.

The Ebitda margin rose by 110 basis points to 17.0 percent and net profit increased by 17.3 percent to R$ 99.2 million (€28.9m-$32.9m) excluding the sale of a non-operating factory in Rio Grande do Norte.