Grendene (GRND3) Q3 2025 earnings summary

Executive summary

• Gross revenue in 3Q25 rose 10.6% year-over-year to R$1.02 billion, driven by strong export performance and higher revenue per pair, despite a 10.2% drop in total volume shipped and challenging domestic conditions.

• Recurring EBIT fell 25.6% to R$117.9 million and recurring net profit dropped 22.9% to R$184.5 million, reflecting higher costs, margin pressure, and increased expenses.

• Gross margin declined to 46.5% (down 1.4 pp), mainly due to increased COGS and lower fixed-cost dilution.

• For the first nine months of 2025, gross revenue increased 13.3% year-over-year, but recurring EBIT fell 15.8% and recurring net profit rose 18.0%.

• Domestic market faced persistent inflation, high interest rates, increased competition, and lower consumer purchasing power, especially among lower-income segments.

Financial highlights

• 3Q25 gross profit was R$353.5 million, down 1.5% year-over-year; gross margin fell 1.4 pp to 46.5%.

• Recurring EBIT for 3Q25 was R$117.9 million (margin 16.7%), and recurring net profit was R$184.5 million (margin 26.2%).

• 9M25 gross profit reached R$850.1 million, up 5.8% year-over-year; gross margin was 45.2%.

• Net cash position at 9/30/2025 was R$1.44 billion, down 9.6% year-over-year.

• Operating cash flow in 9M25 was R$473.7 million.

Outlook and guidance

• Management will maintain a proactive stance, focusing on portfolio adjustments, commercial initiatives, and strict expense control to preserve profitability amid ongoing economic and political uncertainties.

• Continued emphasis on innovation, brand positioning, and operational excellence to ensure sustainable value creation.

• Management is studying the possibility of advancing dividend distributions in 2025 due to upcoming tax changes.

• Export market expected to remain competitive, especially from Chinese products, but logistics have normalized.