A relaxation of anti-Covid measures in Brazil and the addition of Mizuno’s license for the country, which was effectively transferred from Alpargatas to Vulcabras on June 30, helped to boost the latter’s revenues by 40.0 percent to a record 535.9 million Brazilian reais (€86.5m-$99.1m) in the third quarter as compared to a year ago, despite a drop of 4.9 percent in the gross volume of footwear and apparel items to 7.5 million units. Revenues were also 49.1 percent higher than in the corresponding period of 2019.
Mizuno’s sales in Brazil were higher than in the corresponding 2020 period, and they are expected to increase further. Representing 87.3 percent of Vulcabras’ turnover, sales of athletic footwear jumped by 66.3 percent in terms of volume to 4,978,000 pairs in the quarter. Sales of sports shoes sold under the company’s own Olympikus brand and under its distribution and license deal with Under Armour, which started in 2019, grew by 21.9 percent.
Sales of apparel and accessories went up by 40.5 percent to 1,467,000 pieces, due to higher sales of Olympikus clothing and the addition of the Mizuno license. On the other hand, sales of women’s shoes decreased by 89.8 percent to 160,000 pairs as a result of a deal to license out the Azaleia brand in all markets except in Peru and Colombia.
Valcalbras’ sales in Brazil rose by 39.2 percent in the quarter, and they were 49.3 percent higher than in the third quarter of 2019. Exports had a share of only 7.1 percent in the group’s total revenues, but they were up by 50.4 percent from the year-ago period. In particular, Olympikus expanded its presence in Latin America and began to ship its own line of slippers in Argentina.
Net earnings soared by 191.5 percent to a record level of B$ 126.5 million (€20.4m-$23.4m) in the quarter, but they were up by 69.6 percent to B$ 73.6 million (€11.9m-$13.6m) on an adjusted basis. The gross margin improved by 1.9 percentage points to 36.1 percent. As selling and advertising expenses went up by 45.1 percent and general and administrative expenses rose by 4.0 percent, the Ebitda margin jumped by 8.6 percentage points to 25.9 percent, or by 1.8 percentage points to 19.1 percent on an adjusted basis.
With a share of 3.1 percent in the total revenues, e-commerce grew by only 2.4 percent in the quarter as compared to the 2020 period, but it was up by 243 percent as compared to the third quarter of 2019.
Vulcabras says it plans to expand the apparel segment and the e-commerce channel next year to take advantage of the growth in sports lifestyle and wellness that has been brought about by the Covid pandemic.
