Despite reporting 23 percent less unit volume to 51 million pairs, a 10.4 percent drop in period revenues to $896 million (€171.7m), and a net loss of R$8.5 million (€1.6m), Alpargatas realized improving trends in product sellthrough levels in the period ended Sept. 30. The result was a normalization of inventories at the Brazilian company.
However, the group’s international segment continues to be impacted by operational issues, particularly in Europe. Delivery problems caused by a transition of logistic partners between Q1 and Q2 caused a series of cancellations in the EMEA, sending the region’s year-over-year pairage down by 35 percent. EMEA Q2 revenues declined by 17.2 percent to R$109.4 million (€21.0m). North American sales rose by 17.4 percent to R$28.0 million (€5.4m) as unit volume in the U.S. increased by 8.8 percent. In Southeast Asia and Latin American markets, Q3 pairage dipped by 53 percent year-over-year due to higher distributor inventory levels. Total distributor revenues fell by 53.8 percent to R$40.4 million (€7.7m).
By brand, Havaianas’ price per pair increased by 26 percent year-over-year due to price increases and the mix of sales channels, mainly in Europe. In the US, the brand’s revenues per pair rose by 16.0 percent in the quarter despite a higher penetration of sales in off-price channels.
At sustainable lifestyle brand Rothy’s, the Q3 net loss fell by 43 percent to R$6.8 million (€1.3m) from R$12.0 million as Ebit improved to a loss of R$8.2 million (€1.6m) and the gross profit margin improved by 670 basis points to 62.6 percent from 55.9 percent. Brand revenues fell by 20.3 percent year-over-year to R$30.4 million (€5.8m) from R$38.1 million.
