Alpargatas (ALPA4) Q1 2025 earnings summary

Executive summary

• Net revenue rose 17.2% year-over-year to R$1.09B, with gross profit up 31.8% and net income reaching R$112.4M, a significant increase from R$24.7M in 1T24.

• Havaianas Brazil led growth with 14% volume and 22% revenue increase; international operations saw mixed results, with margin recovery in Europe and improved profitability in the U.S.

• Rothy's contributed positively, with net revenue up 20% to USD 43M, EBITDA positive at USD 0.8M, and strong e-commerce and store performance in the U.S., despite ongoing U.S.-China tariff concerns.

• Operational improvements, disciplined capital allocation, and tactical inventory management contributed to margin recovery and cash generation.

Financial highlights

• Consolidated volume grew 10% year-over-year, mainly driven by Brazil's 14% sell-in and 22% revenue growth.

• Adjusted EBITDA surged 87.3% year-over-year to R$206M, with margin expanding 7.1pp to 18.9%.

• Gross margin expanded to 51.3% (up 5.7pp), with Brazil's margin at 46.3% (+5.8pp) and international at 64.8% (+7.2pp).

• Generated BRL 128 million in cash in Q1 and BRL 439 million over the past 12 months, with leverage at -0.6.

• Net sales per pair: Brazil R$15.76 (+7.4%), International R$48.34 (+25%).

Outlook and guidance

• Management expects sell-in and sell-out volumes to realign over the year, with future growth guided by end-consumer demand.

• Continued focus on aligning sell-in and sell-out, inventory management, and sustainable efficiency and profitability improvements.

• Ongoing efforts to improve profitability at Rothy’s and mitigate tariff risks in the US-China corridor.