The past year was a difficult one for Grendene's large export business, and the fourth quarter was no exception. In line with the rest of the year, its overall shipments out of Brazil declined by 12.0 percent in volume to 14.1 million pairs during the quarter, although they rose in terms of value thanks to a favorable impact from currency exchange rates.

Indeed, in terms of reais, revenues per exported pair rose by 21.8 percent, compared with an increase in dollar terms of only 3.7 percent to $4.44. The higher prices and the lower volumes were mainly due to lower exports of Grendene's more basic models, especially to other countries of Latin America. The company said it faced difficulties with exports to Argentina, Venezuela Bolivia and Paraguay, as well a stoppage on exports to Ecuador due to a commercial dispute with Brazil.

The parent company of Ipanema, Melissa, Rider and Grendha reported an overall sales increase of 4.4 percent from the year-ago quarter to 846.9 million Brazilian reals (€198.9m-$225.9m). Domestic revenues improved by 3.4 percent to R$ 624.5 million (€146.6m-$166.7m), while export revenues rose by 7.1 percent to R$ 222.4 million (€52.2m-$59.3m).

For the domestic market, the management reported a timid improvement in the latest quarter, with good sales on Children's Day (Oct. 12), and “reasonable” sales on Black Friday and before Christmas. The company saw reduced levels of inventories at retail as compared with the middle of the year.

The volume of pairs sold in the domestic market went up by 6.5 percent to 41.5 million pairs. The management estimates that this was higher than the growth in the demand, which suggests an improved market share.

The group's gross margin declined by 1.5 percentage point to 50.5 percent, which the company attributed to higher prices for various raw materials and higher inputs. The Ebitda margin decreased by 2.5 percentage points to 28.7 percent, while the group's net income inched up by 0.3 percent to R$ 251.3 million (€59.0m-$67.0m).

For the full year, revenues were up by 3.6 percent from the previous year to R$ 2,825.0 million (€663.4m-$753.8m). Domestic revenues improved by 2.9 percent to R$ 2,168.0 million (€509.1m-$578.5m), while export revenues gained 5.8 percent to R$ 657.0 million (€154.3m-$175.3m). Despite the lower exports volumes, Grendene claimed that it maintained leadership in Brazilian footwear exports for the 16th year running in terms of volume, exporting 35.7 percent of all the shoes made in Brazil in 2018.

The annual gross margin declined by 1.5 percentage points to 47.4 percent, while the Ebitda margin lost 1.0 percentage points, down to 22.4 percent. Net earnings dropped by 11.4 percent to R$ 585.5 million (€137.5m-$156.2m).