“In our strategic review, we have established two central pillars to guide our next steps. The first focuses on prioritisation and competitiveness, revisiting the core of our business model by emphasising what truly matters, ensuring efficiency and optimising capital allocation while strengthening our competitive advantages. The second pillar centres on sustainable growth, where we remain committed to pursuing consistent expansion cycles with clear priorities and a focus on profitability”, Alpargatas updated.

The group achieved a milestone in the third quarter of 2024, reporting net revenue exceeding 1 billion Brazilian reais (170 million US dollars), a 15.4% increase compared to the same period in 2023. This growth was driven by a 13% rise in sales volumes in Brazil and operational improvements that boosted gross margin to 44.2%. The company credited its success to price adjustments, better alignment with consumer demand and the enduring strength of the Havaianas brand.

Internationally, Alpargatas reported a 13.5% revenue growth, reflecting improved performance in key markets such as Europe and the United States (US). Gross margin in international operations grew by eight percentage points. However, the company acknowledged challenges in achieving sustainable growth abroad, citing the need for further scale to restore EBITDA margins to healthier levels.

Financial discipline remained a key aspect of Alpargatas’ strategy, with the company achieving 186 million Brazilian reais (31.62 million US dollars) in cash generation in the third quarter of 2024, compared to 103 million Brazilian reais (17.51 million US dollars) in last year. This marked the sixth consecutive quarter of positive cash flow, bringing the group’s net cash to 58 million Brazilian reais (9.86 million US dollars).

Capital expenditures totalled 47 million Brazilian reais (7.99 million US dollars) during this quarter, aligned with the company’s strategic priorities. Overall investments in the first nine months of 2024 were reduced by 70% compared to the same period last year.

Havaianas’ Brazilian operations showed recovery, with improved profitability and volume growth. The brand also reported progress in reconnecting with consumers, achieving a 1.3 percentage point increase in market share compared to the second quarter of 2024.

Rothy’s, Alpargatas’ subsidiary in the US, reported a 29% year-over-year revenue increase to 39 million US dollars in the third quarter of 2024, supported by enhanced product strategies and optimised supply chain operations. The opening of a flagship store on Fifth Avenue in New York further solidified Rothy’s presence in North America.

Despite the positive momentum, Alpargatas faces a long road to recovery in its international markets. The company highlighted the seasonal complexities and extended commercial cycles in these regions, emphasising the importance of stabilising operations to regain competitive footing. 

Looking ahead, Alpargatas remains committed to achieving consistent and sustainable growth. In Brazil, the company plans to leverage its portfolio and operational efficiencies to maintain profitability. Globally, strategic investments in capacity expansion and customer engagement are expected to drive future growth.