Alpargatas (ALPA4) Q2 2024 earnings summary

Executive summary

• Net sales rose 9.7%–10% year-over-year in 2Q24, with gross profit up 27% and net profit reaching R$23–23.4 million, reversing a loss in 2Q23; normalized net income was R$31 million.

• Havaianas Brazil showed strong recovery, with net sales up 21.5%–22% and volume up 21.5%–22% year-over-year.

• International operations underperformed, with net sales down 7.6%–17% and volume down 2%–2.2% year-over-year.

• Rothy's delivered net sales of USD 59M (+10% YoY), net profit of USD 6M, and EBITDA of US$6.9M, reflecting successful product launches and margin improvements.

• Ongoing transformation and restructuring efforts led to operational recovery, cost containment, and improved financial strength.

Financial highlights

• Consolidated gross margin improved to 47.2% from 40.8% in 2Q23, and EBITDA margin rose to 5.7%–6.9% from -0.9%–0.5%.

• Normalized EBITDA reached R$69.6–70 million, up from R$4.8–5 million in 2Q23.

• Net cash generation for 2Q24 was R$163 million, with a significant turnaround from prior cash consumption.

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

• Net margin improved to 2.3% from -5.7% in 2Q23.

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.

• Ongoing efforts to optimize portfolio, improve manufacturing, and restore international growth.