After recording improved results for several quarters, the parent company of Olympikus and Azaleia reported lower sales and profits for its third quarter, just as it is gearing up to take over the distribution of Under Armour in Brazil, producing some of its shoes locally.
In contrast with an apparent end to the recession in the Brazilian shoe retail sector, the group's total net revenues were off by 6.3 percent to R$ 322.1 million (€74.2m-$84.2m) during the period, as compared to the same quarter of 2017. They declined by 4.8 percent in Brazil, which had a share of 89.4 percent in the total turnover.
The gross margin showed a decline of 2.8 percentage points to 36.6 percent. The Ebitda margin fell by no less than 8.5 percentage points to 17.0 percent, due in part to a 21 percent increase in marketing and advertising expenses, which amount edto 4.6 percent of sales. Net earnings dropped to R$ 39.5 million (€10.3m-$9.1m) from R$ 65.9 million.
Sports and fashion switched roles during the quarter. The group's sales of athletic footwear declined by 5.4 percent to 3.8 million pairs, leading to an 11.2 percent increase in segment revenues to R$ 243.6 million (€56.1m-$63.7m), representing 78.9 percent of the total turnover.
Conversely, the group's sales of women's shoes went up by 15.2 percent to 1.8 million pairs, and their sales advanced by 13.9 percent to R$ 54.9 million (€12.6m-$14.4m).
The turnaround in the women's footwear segment was attributed in part to new merchandising initiatives the launch by Azaleia of a more comfortable line of shoes for the spring/summer season that included fashionable, chunky sneakers.