“At the start of the year, we saw a pattern similar to the previous year: while the domestic market expanded, demonstrating our brands' resilience in the face of a still challenging environment, the foreign market experience difficulties to begin to recover”, said the company.

First Quarter Results

In the first quarter of the year 2024, Grendene’s gross revenue reached 662.4 million Brazilian reais, representing an increase of 0.7% and a decrease of 3.2% in the volume of pairs shipped, on a comparable basis to the same period of last year.

This result was driven by the performance of the domestic market: gross revenue rose by 6.7% to 528.3 million Brazilian reais, with the volume of pairs shipped rising by 4.6%, as compared to the first quarter of 2023. The domestic market also saw a 1.9% increase in gross revenue per pair to 24.05 Brazilian reais, due to price adjustments and a range of higher value-added products. According to the company, the performance of Melissa also contributed to this outcome.

On the other hand, Grendene’s exports suffered at the beginning of the year due to a difficult foreign market. Political and economic instability in Latin America, coupled with high inflation in key markets, dampened overseas demand for the company’s products. In addition, resurgent competition from Chinese footwear exporters is adding pressure. As a result, in the first quarter gross revenue declined by 17.5% to 134.1 million Brazilian reais, on a comparable basis to the same period of the previous year.

In total, the company reported a net revenue of 539.4 million Brazilian reais in the first quarter of the current fiscal year, an increase of 3.4% over the same period last year.

Grendene’s gross profit in the first three months of 2024 reached 240.4 million Brazilian reais, representing a growth of 10.2% year-over-year and the gross margin improved to 44.6% from 41.9% in the same period of last year, “reflecting increased net sales and lower raw material prices”.

While the Brazilian company’s recurring net income decreased by 5.3% to 147.7 million Brazilian reais in the first quarter of the year, net profit was still up by 13.5% to 139.7 million Brazilian reais, as compared to the same period of last year.