Grendene had a tough third quarter, weighed down by weak exports. Its shipments out of Brazil tumbled by 17.7 percent in volume to 7.2 million pairs during the quarter, although they rose in terms of value. The management said various problems affected the business as a whole, but pointed in particular to last May's truck drivers' strike as an important factor impacting export volumes, especially its deliveries to other countries in Latin America, where the primary means of transportation is by highway. This, along with the weakening of the real against other currencies and the political uncertainties in the country, led to an increase in purchasing costs.

The parent company of Ipanema, Melissa, Rider and Grendha reported an overall sales increase of 1.2 percent from the year-ago quarter to 732.8 million Brazilian reals (€174.1m-$198.3m). Domestic revenues improved by 0.4 percent to R$ 599.5 million (€142.4m-$162.2m), while export revenues rose by 5.2 percent to R$ 133.3 million (€31.7m-$36.1m).

The management said the exchange rate had a very strong positive impact, seen in the higher export revenue per unit in reals, which went up by 27.8 percent. In dollars, this increase was limited to 2.2 percent. It also pointed out that, in spite of a considerable reduction of 8.8 percent in the number of pairs shipped during the first nine months of 2018 when compared to same period a year ago, its share of Brazilian exports increased by 0.7 percentage points to 33.5 percent.

The average gross revenues per exported pair rose by 3.9 percent during the quarter to R$ 16.64 (€3.78-$4.28), reflecting a smaller proportion of lower-priced items in the export mix, which are also the products with the highest volume.

In the domestic market, the expected recovery in demand was not as intense as expected. The company saw higher than normal levels of inventories at retail, which slowed the placement of orders placed with the industry, adversely affecting the number of pairs shipped.

The volume of pairs sold in the domestic market went up by 1.1 percent to 36.8 million pairs. The management highlighted the solid growth in volume achieved by the Ipanema brand of sandals, helped by the prolongation of more comfortable temperatures in the southern part of Brazil. However, observers have indicated that rubber shoes like those sold by the group fare better than more expensive types of footwear when the economy is not strong.

The group's gross margin declined by 2.5 percentage point to 46.0 percent, which the company attributed to higher prices for various raw materials and inputs, which was amplified by the weakening of the Brazilian currency.

The Ebitda margin decreased by 2.4 percentage points to 18.9 percent, while the group's net income declined by 23.4 percent to R$ 112.4 million (€26.7m-$30.4m), due higher costs, the small growth in the volume of pairs sold in Brazil and the lower export volume.