Alpargatas realized 17 percent currency-neutral growth for its rubber sandal brand outside of Brazil in the first quarter to 342 million Brazilian reais (€58.2m) as total pairs sold increased 11 percent to 8.9 million. The EMEA region led Havaianas’ sales gains internationally, rising 25 percent currency-neutral to R$207.9 million (€35.4m) as total pairs sold increased 20 percent. Elsewhere, sales of Havaianas, which achieved a 13 percent increase in sales per pair during the period, were up 8 percent in the U.S. to the equivalent of €7.8 million but down 27 percent in China to R$3.7 million. Segment Ebitda was 1.5 percent higher at R$75.0 million (€12.8m).
In the Brazilian home market, Havaianas reported a year-over-year sales improvement of 7.5 percent to R$566.00 million (€96.3m) from R$526.6 million despite a 4.1 percent decline in total pairs sold to nearly 46.8 million and an 8.1 percent dip in Ebitda to R$91.6 million (€15.6m).
The company’s consolidated net income was R$20.8 million (€3.5m). Operating income slipped 28 percent to R$131.8 million (€22.4m) as compared to R$181.9 million. Total revenues rose 9.0 percent to R$927.2 million (€157.7m) from R$850.5 million for the period ended March 31, as the operating margin slid to 11.4 percent from 17.5 percent and consolidated gross margin declined 4.4 percent to 47.6 percent. A 41 percent increase in raw material costs adversely impacted the gross margin.
Alpargatas provided some financial and strategy plans for Rothy’s, the native American digital footwear brand that it acquired a 49.9 percent equity stake in Dec. 2021. In the historically slow first quarter, Rothy’s generated net income of $11 million on 20 percent revenue growth to $32 million. The company, which utilizes 92 design and R&D employees in China and 32 designers in San Francisco, has an annual production capacity of 2.5 million pairs in its own 33-sq.-km factory in China. Rothy’s has high growth potential in the EMEA, its home U.S. market and other regions, Alpargatas believes given its logistics, sales, and marketing infrastructure already in place. Rothy’s currently operates 13 mono-branded stores, up five in the last year, with plans to expand and enter premium B2B channels in the U.S.
