Sales increased by 13.9 percent in 2013 at Alpargatas to a new record of 3,426 million Brazilian reais (€1,056.1m-$1,460.1m), thanks in part to higher average selling prices, and the company's net profit went up by 10.7 percent to R$310.0 million (€95.6m-$132.1m).
The gross margin fell slightly to 41.5 percent but the operating margin before amortization (Ebitda) increased by 0.6 percentage points to 14.4 percent of sales thanks to cost controls and higher productivity.
For the fourth quarter, the parent company of Havaianas and Dupé reported a slightly higher sales increase of 15.3 percent to R$964.9 million (€297.5m-$411.3m), but the gross margin and the Ebitda margin went down to 38.9 percent and 14.1 percent, respectively, partly because of the devaluation of the Brazilian currency. Still, the net profit increased by 9.7 percent to R$72.7 million.
Exports of sandals rose by 10.4 percent in volume in 2013 and generated increases of 37.5 percent in gross profit and 70.9 percent in Ebitda as compared to the previous year. Sales of sandals in the domestic Brazilian market rose by 1.4 percent to 210.3 million pairs, but grew by 10.9 percent in the last quarter, thanks in particular to new products such as the competitively priced Havaiana flat, a higher number of mono-brand stores and the start of deliveries from the new factory in Montes Claros.
The rise in domestic sales continued to be driven by higher sales of lower-margin athletic shoes under the Mizuno, Topper, Rainha and Timberland brands, which grew in volume by 16.1 percent for the year (more on this in Sporting Goods Intelligence Europe).
Sales in Argentina grew by 15.2 percent in reais and by 26 percent in the local currency, driven by athletic footwear and apparel. In other foreign markets, Alpargatas' sales of sandals rose by 10.4 percent in volume, with a 7.9 percent increase in the fourth quarter. They rose by 26.2 percent in value to R$404.3 million (€124.6m-$172.3m) for the year and by 31.2 percent in the last quarter.
Sales of sandals went up for the full year by 33 percent in the U.S., by 24 percent in the European markets controlled by the company and by 5 percent elsewhere around the world. The increases were partly due to increases in the value of the dollar and the euro of 9 percent and 25 percent, respectively.
Profit margins went up, resulting in a 70.9 percent in the Ebitda generated by foreign operations to R$56.4 million (€17.4m-$24.0m) for the year.
The increases in the U.S. were attributed to a higher number of stores and more effective marketing. In Europe, Havaianas launched new collections and marketing campaigns in fashion magazines and in Havaianas stores. A partnership with Swarovski was showcased in the Galeries Lafayette department store and an important shopping center in Jakarta. In South Africa, the company implemented a customization program called “Make Your Own Havaianas.”