Alpargatas' total revenues grew by 8.9 percent in the third quarter to R$865.0 million (€277.1m-$372.8m), delivering a reduced Ebitda margin of 12.1 percent, down from 13.0 percent in the year-ago period. The quarterly net earnings inched up by 0.5 percent to R$74.5 million (€23.9m-$32.1m). Alpargatas says the results were in line with projections, considering that Brazilian consumption had been higher in the third quarter of 2012.
For the first nine months of 2013, the parent company of Havaianas and Dupé has reported a 13.4 percent increase in net revenues to R$2,461 million (€788.2m-$1.06bn) and improved financial results. While the gross margin remained stable at 42.5 percent of sales, the Ebitda margin grew to 14.6 percent from 13.1 percent. Net profit increased by 11.1 percent for the nine-month period to R$237.4 million (€76.2m-$102.6m).
The group's sales of sandals in the Brazilian market declined by 4.9 percent in the quarter and by 2.8 percent during the nine months, as compared to the corresponding periods of 2012. The volume fell to 47.7 million pairs in the latest quarter, but the share taken by the more sophisticated models increased to 53 percent from 45 percent. Alpargatas says that this put pressure on the production capacity of its Campina Grande plant, as it took longer to produce them. The problem should gradually be solved with the ramp-up of the company's new factory at Montes Claros, which started up in October.
On the other hand, the volume of sports shoes sold in Brazil by the group was up by 7.1 percent to 2,840,000 pairs in the quarter and by 18.9 percent to 7,859,000 for the first nine months of 2013. In this segment, Alpargatas is the Brazilian licensee for Timberland and Mizuno, and it owns the Topper and Rainha brands of sports shoes. Sales of Timberland shoes to the multi-brand sales channel improved by 31 percent in the latest quarter.
There were 17 Timberland stores in operation in Brazil at the end of the period, including six franchises, and their sales went up by 20 percent on a same-store basis during the quarter thanks to a strengthening of their casual offerings.
There were also 305 Havaianas stores, up from 244 a year earlier. Havaianas opened kiosks at the Heathrow airport in London and Malpensa airport in Milan during the last quarter, and engaged in marketing campaigns at major holiday spots such as Palma de Mallorca, Ibiza, Nice and Rome.
Higher sales volumes in Europe and the U.S., coupled with higher sales to foreign distributors and the depreciation of the Brazilian real led the group to book a 25.1 percent increase in international sandal revenues to R$331.1 million (€106.5m-$143.4m). The number of pairs increased by 11.3 percent, with gains of 34 percent in the U.S., 25 percent in Europe and 5 percent through distributors.
Export revenues rose by only 19.8 percent during the third quarter, but the volume dropped by 2.9 percent to 5,627,000 pairs because of delays in the issuance of import licenses in Argentina and very high export levels attained in the year-earlier period.
Profit margins on these operations improved during the first nine months, but Ebitda turned negative in the third quarter (more in Sporting Goods Intelligence Europe).