Vulcabras’ net income rose by 49 percent to 81.3 million Brazilian reais (€14.6m) in the fourth quarter of 2021. Operating earnings (Ebit) went up by 58 percent to R$89.3 million (€16.1m) in the period ended Dec. 31, as the gross margin hit 36.1 percent versus 32.7 percent a year earlier on higher volumes, offsetting higher raw material costs.
The quarterly revenues jumped by 35 percent to R$620.0 million (€111.8m), thanks partly to the company’s acquisition of the Mizuno license for Brazil from Alpargatas, with effect from last June. Besides its ownership of the Olympikus brand of athletic shoes and apparel, Vulcabras is also the Brazilian distributor for Under Armour since 2019.
Both of these new developments and higher sales of Olympikus items helped drive sales increases of 52 percent in athletic footwear to R$506.6 million (€91.3m) and 59 percent in apparel and accessories to R$61.6 million (€11.1m). Net revenues from e-commerce jumped by 81 percent year-over-year to R$26.2 million (€4.7m).
On the other hand, the sale of the Azaleia brand to Grendene in 2020, except for the Peruvian market, caused Vulcabras’ sales of women’s shoes to decline by 65 percent to just R$18.9 million (€3.4m) during the period.
For all of 2021, the 70-year-old Brazilian company, which produces its own shoes in two domestic factories, generated a net income of R$313.8 million (€56.6m), a tenfold increase from R$31.6 million in 2020. The gross margin improved by 5.9 percentage points to 35.3 percent, and the Ebit margin hit a level of 18.1 percent, up shar^ly froù 3.1 percent. There was a non-recurring expense of R$63.8 million last year related to a number of lawsuits filed by subsidiaries for the recovery of Pis/Cofins credits. Net debt at year-end stood at R$236.4 million (€42.6m) versus R$62.5 million at the end of 2020.
Annual revenues increased by 58 percent to R$1,876 million (€336.6m). Athletic footwear rose by 84 percent to R$1,572.7 million (€283.5m), and the volume exceeded 17.5 million pairs. Apparel/accessories climbed 51 percent higher to R$140.4 million (€25.3m) from the sale of 5.23 million units. On the downside, women’s footwear fell by nearly 66 percent to R$48.6 million, or the equivalent of just €8.76 million, with the sale of 730,000 pairs. Annual e-commerce revenues were 28 percent higher at R$62.3 million (€11.2m). Geographically, the Brazilian market continued to deliver most of the topline, rising by 60 percent. Outside the local market, revenues rose by 36 percent to R$137.7 million (€24.8m).
Vulcabras’ 2022 growth strategy will focus on generating higher sales in the direct-to-consumer channel (e-commerce and physical stores) and the further development of apparel, with both segments being led by new executives. More short-term, the company is expressing enthusiasm about a new national collection from Mizuno that is entirely developed in-house for a launch in the current first quarter. Vulcabras says the range concentrates on the needs of the Brazilian consumer and is forecast to provide the company with better margins thanks to synergies in production. Olympikus and Under Armour, meanwhile, are forecast to deliver solid quarterly results.
