Vulcabras Azaleia did not grow in the first quarter as fast as it did in 2017, leading up to its public offering in October. The management explained this with the fact that expectations for improved consumption of apparel and footwear in Brazil seem to have been postponed.

While the company was able to continue to generate higher sales of sports shoes and clothing under its Olympikus brand, which is positioned in a relatively low and more accessible segment of the Brazilian sports market, the results of its two brands of women's footwear, Azaleia and Dijean dropped sharply, but the management expressed confidence in future improvements in sales and profitability.

The group's total net revenues declined by 1.3 percent to R$ 292.0 million (€67.9m-$81.1m) in the quarter. Sales rose by 1.3 percent to R$ 254.7 million (€59.2m-$70.8m) in Brazil but fell by 16.2 percent outside the country in comparison with the first quarter of 2017, when Vulcabras shipped a high quantity of merchandise to Argentina, but the foreign business should be more balanced during the balance of this year.

Sales of athletic footwear rose by 2.4 percent to R$ 227.5 million (€52.9m-$63.2m), representing 77.9 percent of the group's total turnover. In terms of volume, Vulcabras' total deliveries declined by 6.7 percent, with drops of 0.9 percent to 3.4 million pairs for athletic footwear and 18.6 percent to 1.2 million pairs for women's shoes. Shipments of clothing went up by 21.2 percent to 234,000 pieces.

The gross margin suffered a drop of 2.2 percentage points to 34.4 percent, although the management sees it reverting to last year's levels. The decline in the first quarter was attributed to various factors including a smaller number of working days, promotions in the women's footwear segment and the postponement of the release of the new Olympikus collection.

The Ebitda margin declined by 2.5 percentage points to 17.1 percent in the quarter. However, Vulcabras posted a significant increase in cash flow and reduced sharply its interest charges, as the company reversed its net bank debt to a positive cash balance of R$ 65.7 million (€15.3m-$18.3m).

As a result, the company was able to report a 28.0 percent increase in net income to R$ 33.4 million (€7.8m-$9.3m) for the quarter.

Vulcabras accelerated the modernization of its three Brazilian factories, shifting some of the capacity from the women's business to the faster-growing sports business. While raising its total advertising and marketing expenses by 1.9 percent to 3.7 percent of revenues, the company intensified digital marketing for Olympikus, bringing more customized messages to different target groups. The brand has signed a contract to sponsor the 5-seconds countdown of the SporTV channel's coverage of this year's FIFA World Cup.