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 were made across channels; international markets were impacted by US tariffs and Middle East instability.

• Despite lower volumes, price strategy and product mix preserved margins, and inventory levels for key brands remained healthy.

• Strong operating cash generation and robust financial income supported capital allocation, including significant dividend approvals.

• Net revenue for 4Q25 was R$705.1 million, down 18.0% year-over-year, with full-year 2025 net revenue at R$2.58 billion, down 1.7% from 2024.

• Challenging macroeconomic conditions, selective consumer demand, and increased competition pressured volumes and margins, especially in the domestic market.

Financial highlights

• Gross revenue for Q4 was R$915.7 million, down 12.2% year-over-year; gross profit fell 27.1% to R$318.9 million, with gross margin at 45.2%.

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

• For FY2025, gross revenue grew 5.1% to R$3,401.7 million, but volume declined 11.1%; recurring net profit rose 2.4% to R$815.9 million.

• Gross revenue per pair rose 18.3% for the year, reflecting a focus on higher value-added products.

• Recurring EBITDA for FY2025 was R$467.6 million, down 21.1% year-over-year.

Outlook and guidance

• 2026 is expected to remain challenging due to persistent macroeconomic headwinds, elections, and global events, but management anticipates growth in revenue, volume, and margins, supported by structural adjustments and favorable raw material costs.

• Management remains focused on revenue quality, margin preservation, and operational discipline amid ongoing market headwinds.

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