Grendene (GRND3) Q4 2025 earnings summary

Executive summary

• Domestic demand was pressured by high interest rates, constrained income, and increased indebtedness, while competition from imports intensified and inventory adjustments impacted volumes; gross revenue rose 5.1% to R$3.4 billion, but net revenue fell 1.7% to R$2.6 billion.

• Recurring net profit for 2025 rose 2.4% to R$815.9 million, while reported net income was R$644.8 million, down 12.3% year-over-year; recurring net margin reached a five-year high of 33.7%.

• Strong cash generation and robust financial income supported a solid net cash position of R$1.4 billion and enabled significant dividend payouts.

• Extraordinary dividends of nearly R$980 million were approved, with total distributions of R$1.4 billion and a payout ratio of 218.4%.

• The company maintained a focus on price strategy, product mix, and operational efficiency to preserve margins despite lower volumes.

Financial highlights

• Gross revenue for 4Q25 was R$915.7 million, down 12.2% year-over-year; gross profit was R$318.9 million, down 27.1%; gross margin was 45.2%.

• Recurring EBIT for 4Q25 was R$122.5 million, down 43.7%; recurring net profit was R$286.1 million, down 17.7%.

• Full-year recurring EBIT was R$367.3 million, down 27.7%; recurring EBITDA was R$467.6 million, down 21.1%.

• Export revenue grew 40.4% to R$817.1 million, offsetting a 2.6% decline in domestic sales.

• Volume sold was 123.9 million pairs, down 11.1% year-over-year; average gross revenue per pair rose 18.3% to R$27.45.

Outlook and guidance

• Management expects continued macroeconomic pressures, high interest rates, and competition from imports to challenge domestic demand, but will focus on value capture, operational efficiency, and investments in innovation and sustainability.

• Early 2026 shows signs of volume replenishment in retail channels as inventory levels normalize.

• The company is monitoring tax reform impacts and adapting systems accordingly.