Despite unstable macroeconomic conditions and a challenging retail environment, the Brazilian Vulcabras group reported record revenues and strong gross margin and Ebit growth in Q1, which ended March 31. Ebit rose by 45 percent to 93.2 million Brazilian reais (€16.7m) as the year-over-year gross margin grew by 430 basis points to 39.5 percent from 35.5 percent. Ebitda increased by 67 percent to R$91.1 million (€16.3m) as net income rose by 55 percent to R$83.6 million (€15.0m).
Vulcabras generated an 18 percent increase in Q1 athletic footwear sales to R$461.2 million (€82.7m) despite a 1.0 percent decline in total pairs to 4.04 million. Other footwear revenues rose 11 percent to R$42.7 million (€7.7m), and apparel/accessories sales lifted 37.7 percent higher to R$67.2 million (€12.1m).
Total Q1 revenues expanded by 19.6 percent to R$571.1 million (€102.5m) from R$477.7 million despite a 30.0 percent decline in quarterly sales outside Brazil to R$46.2 million (€8.3m). E-commerce sales improved more than 120 percent year-over-year to R$50.7 million (€9.1m), accounting for 8.9 percent of all revenues. In Argentina, the group’s primary export market, local distributors faced difficulties obtaining import licenses and credit guarantees. Elsewhere, high inflation in Latin American markets reduced order volumes, and in Peru, unusual weather and political strife contributed to lower year-on-year sales.
But the domestic Brazilian market was robust in Q1, with all brands and categories posting higher sales. Overall domestic sales increased by 27.5 percent to R$524.9 million (€94.2m), helped by the considerable expansion of the Mizuno and Under Armour footwear businesses and higher apparel/accessories sales.
