Alpargatas (ALPA4) Q2 2025 earnings summary

Executive summary

• Net operating revenue for H1 2025 reached R$2.19 billion, up from R$1.95 billion year-over-year, with net income of R$199.4 million compared to R$48.1 million in the prior year period.

• International growth model drove 26% sell-out increase in Europe and 30% volume growth in the USA, while Brazil market share rose 2.5pp year-over-year, with DTC and specialized channels up 22%.

• Adjusted EBITDA surged 176.6% to R$193 million in 2Q25, with margin expanding to 17.5% from 6.8% in 2Q24, reflecting operational improvements and cost discipline.

• Brand strategy focused on digital engagement, global ambassadors, and successful new collections, driving higher value product sales.

• The audit committee and executive board confirmed the accuracy and fair presentation of the financial statements, with an unqualified review report from PwC.

Financial highlights

• Consolidated net revenue rose 8.3% year-over-year to R$1.1B in 2Q25; gross profit up 25.7% to R$603 million; gross margin expanded 7.6 p.p. to 54.7%.

• Net income reached R$87 million in 2Q25, up 271.1% year-over-year; normalized net income was R$99.8 million, excluding non-recurring items.

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

• Net margin for H1 2025 was 9.1%, up from 2.5% in H1 2024; net debt at June 30, 2025, was R$-194 million, reflecting a strong capital position.

• Working capital consumption of R$104 million in 2Q25, 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.

• Capital reduction of R$850 million approved by the board, pending shareholder and debenture holder approval.

• 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.