Grendene's gross revenues from exports outside Brazil shot up by 70.1 percent in the third quarter to 143.4 million reais (€46.6m-$62.8m) as compared to the same period a year ago, thanks only in part to a 37.0 percent increase in the average export price per pair due to the devaluation of the national currency. Exports were up by 50.8 percent before the currency effect. In terms of volume, they grew by 24.3 percent to 10.9 million pairs for the period.
For the first nine months of this year, foreign revenues increased by 27.6 percent to R$372.2 million (€121.4m-$163.1m) in value and by 15.6 percent to 35.6 million pairs in volume for the parent company of Ipanema, Rider, Grendha and Melissa. In terms of pairage, the group sold 40.4 percent of all the shoes exported from Brazil in the first nine months of this year. Its performance in the third quarter compares with export increases during the same period of 1.0 percent in U.S. dollars and 11.0 percent in volume for the whole Brazilian shoe industry.
Grendene managed to increase its sales also in Brazil. They rose by 12.6 percent in value and by 11.6 percent in volume during the third quarter. For the first nine months, the company's gross domestic revenues were up by 20.0 percent to R$1,475.1 million (€483.2m-$649.4m), with an increase in volume of 23.8 percent to 111.7 million pairs, in spite of a relatively difficult economic situation in the country.
Total net revenues went up by 20.5 percent to R$598.2 million (€195.5m-$263.5m) in the quarter. They grew by 21.5 percent to R$1,485.1 million (€486.9m-$654.4m) for the nine months, but its total gross revenues were higher at R$1,847.3 million (€603.5m-$811.0m). Net earnings grew at lower levels of 2.2 percent for the quarter and 11.4 percent for the nine months, ending up at R$122.1 million (€39.8m-$53.3m) and R$290.6 million (€94.5m-$127.0m) for those two periods, respectively.
In fact, the gross margin declined by 3.3 percentage points to 47.0 percent in the quarter and by 0.3 percentage points to 45.2 percent for the nine months. The company blamed an increase in raw material prices, especially rubber since the month of July, and higher costs associated with the start-up of a new production facility in Sobral, despite further improvements in productivity. The factory will have a capacity to make between 240 and 250 million pairs per year.
The Ebitda and Ebit margins were off by more than two percentage points in the quarter, but they were still up slightly for the nine months to 17.5 percent and 19.3 percent, respectively.
In its quarterly report, Grendene announced the establishment of a new office in Milan last September for Melissa. The company inaugurated a few weeks ago its 100th franchised Clube Melissa store, located in the Higienopolis shopping center of São Paulo.
Grendene said that volumes and revenues should continue to increase in the fourth quarter, but margins should again be lower than a year ago. The company is maintaining the growth targets already set for the seven-year period ending in 2015.