Companies

Grendene posts strong nine-month performance

Nov 21, 2024 Brazil

Despite a challenging macroeconomic environment, the Brazilian footwear company, owner of the Melissa and Ipanema brands, has posted a strong performance in the first nine months of the year

“We closed the first nine months of 2024 with solid results, highlighted by net income growth driven by expanded operating margins and efficient cost management. Our strategy focused on strengthening the domestic market and maintaining a robust financial structure, resulting in consistent cash generation. These results reaffirm the Company’s commitment to delivering sustainable value to its shareholders while maintaining a focus on innovation, operating efficiency, and market expansion to confidently face future challenges”.

Nine Months Results

In the first nine months of 2024, Grendene reported a gross revenue of 2.2 billion Brazilian reais (360.6 million euros), an increase of 5.1% on a comparable basis to the same period of 2023. While the volume of pairs shipped decreased by 1.7% year-on-year to 95.5 million, the gross revenue per pair increased by 7.0% year-on-year.

“We continue to face a challenging domestic consumption scenario, characterized by a gradual recovery in household spending power”, said the company in a statement. Nonetheless, its nine-month gross revenue at home grew by 7.8% to 1.8 billion Brazilian reais (300.0 million euros), as compared to the same period last year.

Exports, on the other hand, decreased by 6.4% year-on-year to 367.8 million Brazilian reais (60.5 million euros) in the first nine months of 2024, mainly due to the impact of “rising interest rates across multiple economies, increased economic volatility, along with global logistical challenges and regional conflicts”.

Overall, in the first nine months of the current year, the Brazilian company reported net revenue of 1.77 billion Brazilian reais (290.9 million euros), on a comparable basis to the same period of 2023.

In the year to September, Grendene’s operating expenses decreased by 7.8% to 544.5 million Brazilian reais (89.5 million euros), or 30.8% of net sales, down from 35.3% in the same period of the prior year.

The company reported a nine-month EBIT increase of 99.2% to 259.3 million Brazilian reais (42.6 million euros), as compared to 130.2 million Brazilian reais (21.4 million euros) in a similar period a year ago. Excluding non-recurring items, recurring EBIT rose by 33.8% to 302.0 million Brazilian reais (49.6 million euros), a 3.6 percentage point improvement in the recurring EBIT margin, which went from 13.5% to 17.1%.

In the year-to-date, Grendene’s recurring net income amounted to 448.8 million Brazilian reais (73.8 million euros), a 10.9% increase as compared to the first nine months of last year, with a recurring net margin improvement to 25.4% from 24.2% in the same period a year ago.

“The increase in net income was driven by revenue growth, enhanced operating efficiency, and improved financial results. This performance reflects Grendene’s ability to leverage its operations and manage finances effectively, even in a challenging environment, ensuring sustainable growth and continuous improvement in margins”, said the company.

1 Brazilian real = 0.16 EUR

Image Credits: breradesignweek.it

Brazil Companies Footwear Grendene Quarter Results Results