The Brazilian footwear maker Grendene posted a 15 percent decline in Q2 net income to 57.2 million Brazilian reais (€10.6m) from R$65.7 million for the period ended June 30. Ebitda was off by 13 percent to R$24.3 million but gross margin improved by 670 basis points to 40.9 percent from 34.2 percent.
Gross revenues fell by 8.6 percent to R$586.2 million (€108.8m) from R$641.4 million, with domestic sales coming in flat at R$499.3 million (€92.7m) on a 4.7 percent decline in total pairs to 23.2 million. Export sales fell by 39 percent to R$86.9 million (€16.2m) as pairage tumbled to 3.6 million.
Grendene said it had been told by distributors and retailers that top-tier footwear brands had higher sell-out than sell-in rated during the period, which the company suggests means market inventory levels are below historical levels. With that in mind, the group said it anticipates higher sell-in rate as economic conditions improve.
As for the export market, market declines in South Africa and Australia, impacted Q2 segment sales. Grendene remains committed to strengthening its brands and distribution channels within its Grendene Global Brands (GGB) unit despite a challenging retail market worldwide, particularly in the U.S. where it has invested in a digital influencer program to increase brand awareness.
The online channel, largely owned stores and Amazon, was the primary growth catalyst for GGB during the first half. The wholesale channel had lower than expected sales due to issues in North America with reduced consumption, high inventory levels and rising inflation, the company said. In China, meanwhile, sales were 15x larger than in the year-ago quarter due to marketing and a favorable year-over-year comparison.
