Alpargatas (ALPA4) Q2 2025 earnings summary

Executive summary

• Net revenue grew 8.3% year-over-year to R$1.1 billion in 2Q25, driven by improved channel and product mix in Brazil and international markets, with Europe up 6% in peak season and U.S. volume up 30%.

• Brazil market share rose 2.5pp year-over-year, reaching 77% in the grocery channel, and 22% growth in specialized channels.

• Adjusted EBITDA surged 176.6% to R$193 million, with margin expanding to 17.5% from 6.8% in 2Q24, reflecting operational improvements and cost discipline.

• Strategic focus on digital engagement, global ambassadors, and new collections, alongside structural improvements in global operations and marketing.

• Board approved a capital reduction of R$850 million, pending shareholder approval, to optimize capital structure and support long-term growth.

Financial highlights

• Gross margin rose 7.6 p.p. to 54.7% in 2Q25, with gross profit up 25.7% to R$603 million.

• Adjusted EBITDA margin reached 17.5%, up 10.6pp year-over-year; EBITDA surged 203.1% to R$174.7M.

• Free cash flow to shareholders LTM at R$321M; capex of R$55M in 2Q25, up from R$20M in 2Q24.

• Net cash position at quarter-end, with leverage at -0.3x Net Cash/EBITDA; net leverage (Net Debt/EBITDA LTM) at 0.4x in 2Q25.

• Working capital consumption of R$104 million, mainly due to higher accounts receivable and inventory replenishment.

Outlook and guidance

• Strategic priorities include strengthening profitability in Brazil, rebuilding scale in Europe, executing the US business model transition, and focusing on distributor-led markets.

• Continued commitment to financial discipline, efficiency, and active inventory management across the supply chain.

• Dividend payments expected to resume as profitability grows, with payout calibrated to investment needs and leverage targets.

• Capital reduction approved by the board, pending shareholder and debenture holder approval.