The continued economic problems in Brazil helped Alpargatas to sell more of its cheap rubber sandals under the Havaianas and Dupé brands in its domestic market in the third quarter. Volumes increased by 0.8 percent to 57.0 million pairs. Sales of other products under the Havaianas brand name grew by 8.6 percent
Sales of sandals in other countries declined by 25.7 percent to R$110.4 million (€30.5m-$32.5m), due primarily to persistent problems in Angola and Venezuela.
The volume of sandals and Havaianas brand extensions grew by 11.4 percent in Europe, the Middle East and Africa, and by 18.7 percent in the U.S., thanks in part to higher stock replenishment by major clients in Europe because of hot summer weather conditions.
Average selling prices in Europe and the U.S. increased by about 5 percent leading to higher gross margins. The terrorist attacks in France and the devaluation of the pound sterling didn't help Havaianas in Europe, but company officials expect a sales increase of about 10 percent in the region in local currencies for the full financial year.
Combined with 5.9 percent increase in the number of products sold in Brazil under the Osklen brand name, Alpargatas total revenues in its home country rose by 5.8 percent to 678.2 million reais (€187.6m-$199.7m) in spite of another big decline in its local sales of sports products.
Even without including sales in Brazil of Timberland, Topper and Rainha products, which were discontinued earlier this year, Alpargatas suffered a drop of 29.9 percent to 936,000 in the number of pairs of sports shoes sold in the country during the third quarter. Sales of these products in Argentina fell by 21.3 percent to 1,502,000 pairs.
The company's remaining sporting goods operations are the distribution of Mizuno in Brazil and Argentina and of Topper in Argentina. Alpargatas said that the demand for its more basic models of Mizuno shoes was not fully met, but the situation should improve in the coming months with the progress of a new program of domestic production.
In Argentina, Alpargatas had to face the opening up of the market to imports of sports shoes that use cemented technology, which allowed some major international brands to gain market share in that country.
Alpargatas is reviewing its sourcing strategy to adopt solutions that will allow Topper to be more competitive in this product segment. The group's total sales in Argentina fell by 34.3 percent to R$194.2 million (€53.7m-$57.2m).
Alpargats' total revenues declined by 9.4 percent to R$982.8 million (€271.9m-$289.5m) in the quarter. The gross margin dropped by 1.2 percentage points to 42.6 percent and the Ebitda margin eased down by 0.6 points to 13.1 percent, but the net income margin rose by 1.6 points to 8.6 percent.