Sales increased by 13.9 percent in 2013 at Alpargatas to a new record of 3,426 million Brazilian reais (€1,056.1m-$1,460.1m), thanks in part to higher average selling prices, and the company's net profit went up by 10.7 percent to R$310.0 million (€95.6m-$132.1m).
The gross margin fell slightly to 41.5 percent but the operating margin before amortization (Ebitda) increased by 0.6 percentage points to 14.4 percent of sales thanks to cost controls and higher productivity.
For the fourth quarter, the parent company of Havaianas and Dupé reported a slightly higher sales increase of 15.3 percent to R$964.9 million (€297.5m-$411.3m), but the gross margin and the Ebitda margin went down to 38.9 percent and 14.1 percent, respectively, partly because of the devaluation of the Brazilian currency. Still, the net profit increased by 9.7 percent to R$72.7 million.
Higher overall domestic sales continued to be driven by rising sales of lower-margin athletic shoes under the Mizuno, Topper, Rainha and Timberland brands, which grew in volume by 16.1 percent for the year to 11.03 million pairs. Mizuno went up by 33 percent, Rainha by 11 and Timberland by 27 percent.
Rainha, which is house brand of the group, gained ground in specialty sporting goods stores with the launch of new affortable line of running and training shoes. Timberland strengthened its casual shoe offerings and ended the year with 17 stores, with same-store sales up by 12 percent for the year and by 22 percent in the fourth quarter.
Alpargatas extended its licensing contract with Mizuno last year for 13 more years, with an automatic renewal every 13 years.
Exports of sandals rose by 10.4 percent in volume in 2013 and generated increases of 37.5 percent in gross profit and 70.9 percent in Ebitda as compared to the previous year.
Sales in Argentina grew by 15.2 percent in reais and by 26 percent in the local currency, driven by athletic footwear and apparel. Sales of athletic shoes under the Topper and Mizuno brand names grew in Argentina by 7.6 percent for the year to 5.3 million pairs, with a rise of 35.7 percent in the fourth quarter. One of the drivers was the signing of a contract by Topper with the Racing Club.
In other foreign markets, Alpargatas' sales of sandals rose by 10.4 percent in volume, with a 7.9 percent increase in the fourth quarter. The company began to export its sandals in some new markets such as Australia, India, China, Vietnam and Indonesia.
Sales of sandals went up for the full year by 33 percent in the U.S., by 24 percent in the European markets controlled by the company and by 5 percent elsewhere around the world. The increases were partly due to increases in the value of the dollar and the euro of 9 percent and 25 percent, respectively
The increases in the U.S. were attributed to a higher number of stores and more effective marketing. In Europe, Havaianas launched new collections and marketing campaigns in fashion magazines and in Havaianas stores. A partnership with Swarovski was showcased in the Galeries Lafayette department store and an important shopping center in Jakarta. In South Africa, the company implemented a customization program called “Make Your Own Havaianas (more in Sporting Goods Intelligence Europe).
