World Footwear


Grendene posts fourth quarter results below expectations

Mar 14, 2023 Brazil
Grendene posts fourth quarter results below expectations
The Brazilian footwear company suffered a revenue decline and an earnings loss in the last quarter of 2022, mainly due to a decline in the consumers’ disposable income caused by the difficult macro environment
“The challenging macroeconomic scenario impacted Grendene’s results in 4Q22, with figures below those we had projected. This scenario was the result of the known unfavourable conditions that have existed since the beginning of the year: high inflation, high-interest rates, high unemployment, and indebtedness, thus reducing the disposable income of consumers. In addition to these factors, below-average temperatures in the South and Southeast and political and economic uncertainty stemming from the electoral process have produced an environment that discourages family spending, particularly of non-essential goods”, reads the company’s statement.

Fourth Quarter Results

In the fourth quarter of fiscal 2022, Grendene's gross revenue decreased by 0.9% to 938.0 million Brazilian reais, as compared to the same period of last year, reflecting a decline of 14.9%, year-over-year, in the volume of pairs sold (43.6 million pairs).

Accordingly, its net revenue in the three months to the 31st of December decreased by 3.3%, amounting to 763.7 million Brazilian reais, on a comparable basis to the same quarter of fiscal 2021.

The company's gross margin in this period also declined by 1.0 percentage points to 45.9%, as compared to the similar period of the prior year, “as a result of the lower volume shipped”.

In the last quarter of 2022, the company's net profit totalled 202.6 million Brazilian reais, down by 12.1% over the prior fiscal year.

Full Year 2022 Results

The Brazilian footwear company reported gross revenue of 3.12 billion Brazilian reais in 2022, which reflects an increase of 9.6% over 2021. In this period, the company shipped 148.2 million pairs, down by 3.8%  as compared to the previous year. Annual net revenue rose then by 7.3%, year-over-year, amounting to 2.51 billion Brazilian reais.

However, in the twelve months to the 31st of December 2022, Grendene's net profit declined by 5.5%, on a comparable basis to the prior year, totalling 568.0 billion Brazilian reais.

2023 Outlook

The company said it was “hopeful and confident” about its performance for the current fiscal year, despite the challenging business environment. “In 2023, the business environment for the Brazilian footwear industry will remain challenging due to elements that were already present in 2022: high inflation, continued high-interest rates, high unemployment, income reduction, and political uncertainty”, it detailed.

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