Alpargatas spent much of Q1 working on cash generation, capitalizing on efficiencies, and simplifying its business. The effort, largely focused on its home market, included better alignment between sell-in and sell-out levels and cash generation of $260 million Brazilian reais (€46.7m) versus cash consumption of R$271 million.
The Brazilian group, also the owner of the flip-flop sandal brand Havaianas, reported Ebit of R$40.9 million (€7.3m) against a loss of R$257.5 million in the year-ago period ended March 31. The Q1 net profit was R$24.7 million (€4.4m) against a loss of R$199.7 million as gross margin improved by 260 basis points to 45.7 percent. Total sales inched up 3.2 percent to R$931.8 million (€167.2m) from R$902.5 million in the year-ago quarter, fueled by 12.0 percent unit volume growth in Brazil to 45.5 million pairs and a 14.0 percent improvement in the market’s revenues to R$655.8 million (€117.7 million). Conversely, international pairage tumbled by 9.6 percent to 6.9 million units, and corresponding sales fell nearly 17 percent to R$265.3 million (€47.6m).
In Europe, the company has worked to significantly improve its logistics operations, given it had a source of unit volume loss and cost increases in 2023. Alpargatas said it generated sequential progress in the market in Q1 despite a decline of about 10 percent in year-over-year sales.
At the Rothy’s subsidiary, gross margin jumped 660 basis points to 62.0 percent from 55.4 percent in Q1 as total sales lifted 9.8 percent higher to R$34.3 million (€6.2m) from R$31.2 million. The year-over-year Ebit loss was reduced by 65.5 percent to R$3.6 million from a loss of R$10.5 million. The quarterly net loss, meanwhile, contracted by 80 percent to R$1.9 million from a loss of R$9.3 million.
