Alpargatas suffered double-digit sales declines for its rubber sandal brand in both the U.S. and China during the second quarter but realized an 11.8 percent increase in price per pair during the period. Havaianas’ sales declined 46.3 percent in China to 8.7 million Brazilian reais (€1.7m) due to the country’s Covid-19 restrictions and by 23 percent in constant currency to R$49.8 million (€9.5m) in the U.S. as the price per pair increased 21 percent year-over-year to R$73 (€13.94). In the EMEA, a Q2 reported revenue decline of 14 percent to R$291.7 million (€55.7m) was impacted by currency exchange rates. EMEA net revenue rose 5 percent on a constant-currency basis on better DTC and physical store sales, resulting in more full-price product purchases.
Overall, the group realized a 1.9 percent increase in total Q2 revenues to R$1,061.4 million (€202.7m) from R$1,041.2 million. Consolidated net income, not comparable to the prior year period, came in at R$63.8 (€12.2m). Recurring Ebitda fell 16.7 percent to R$177.5 million (€33.9m) as gross margin came in at 52.2 percent versus 55.7 percent in the year-ago period. Lower unit volume, the downtick in gross margin and higher operating costs largely related to distribution were the primary contributors to a decline in recurring Ebitda margin to 19.5 percent from 30.1 percent for all markets outside Brazil. Total pairs sold outside Brazil were 11 million, down 5 percent year-over-year.
In the Brazilian home market, Havaianas reported a 19 percent increase in year-over-year revenues to R$616.5 million (€117.8m) as the price per pair rose 21 percent. An average price increase of 6.5 percent for a new collection finished its implementation in July.
Alpargatas continues to make investments in its digital platform. In the future, once the EMEA market is launched in October, the Havaianas brand will have the same e-commerce and marketing cloud and services in the EMEA, Brazil, and the U.S. In Q2, average digital tickets rose 13 percent in Brazil. The U.S. DTC platform realized a 124 percent increase in conversion rate.
