Alpargatas (ALPA4) Q2 2024 earnings summary

Executive summary

• Net sales rose 10% year-over-year in 2Q24 to R$1.0 billion, with strong Havaianas Brazil performance and commercial execution improvements.

• Normalized net income was R$31–32 million, reversing a loss in 2Q23; consolidated net income was R$23–23.4 million.

• Cash generation in 2Q24 was R$163 million, reflecting inventory adjustments, working capital improvements, and a turnaround from prior cash consumption.

• Havaianas Brazil showed 22% volume and net sales growth, while international operations underperformed with net sales down 17% and volume down 2%.

• Rothy's delivered net sales of USD 59M (+10% YoY), net profit of USD 6M, and EBITDA of USD 6.9M, with all new stores profitable.

Financial highlights

• Gross profit rose 27% year-over-year to R$479 million, with gross margin improving to 47.2% from 40.8%.

• Normalized EBITDA reached R$69.6–70 million (margin 6.9%), up from R$4.8–5 million in 2Q23.

• Net cash generation for 2Q24 was R$163 million, and net financial position improved by R$163–220 million sequentially.

• COGS decreased 2% year-over-year, driven by manufacturing and raw material cost reductions.

• Havaianas total volume increased 17.4% YoY, with Brazil up 21.5% and international down 2.2%.

Outlook and guidance

• Focus remains on sustainable growth, operational simplification, and capital discipline to drive returns.

• Continued investment in brand strength and marketing, with a 26% increase in marketing spend year-over-year.

• International business requires further adjustments and brand rebuilding to achieve consistent performance.

• Anticipate further improvements in gross margin and operational efficiency as portfolio simplification and S&OP processes mature.