Companies

Grendene reports soft first-quarter results

May 14, 2026 Brazil

Despite higher sales volumes, the Brazilian company reported weaker revenue and margins in the first quarter as consumers shifted towards lower-priced products due to cautious spending

“In 1Q26, the macroeconomic environment remained challenging for consumer spending, reflecting continued consumer selectivity, high household indebtedness, and intensified competition in the domestic market. This backdrop weighed on demand dynamics throughout the quarter, affecting purchasing behavior and the pace of inventory replenishment across the retail chain”, said the company.

First-Quarter Results

In the first quarter of the 2025 financial year, Grendene, which owns brands such as Ipanema and Melissa, reported a gross revenue of 682.9 million Brazilian reais (136.0 million US dollars), representing a 3.2% year-on-year decline. This decline reflects a shift towards lower-priced products, with gross revenue per pair falling by 4.7%, despite a 1.6% increase in volumes sold.

The company's performance in its domestic market of Brazil was particularly impacted by a more selective consumption environment during the quarter. Consequently, gross revenue decreased by 1.5% year-on-year to 511.7 million Brazilian reais (101.9 million US dollars), reflecting a 9.3% increase in volumes sold and a 10.0% drop in gross revenue per pair.

Gross export revenue also reflected lower volumes in a more cautious international market, although partially offset by favourable mix and exchange-rate effects. As a result, gross revenue increased by 2.5% year-on-year to reach 32.6 million US dollars, despite a 16.4% decline in export volumes. This was driven by a 22.6% increase in gross revenue per pair.

Against this backdrop, the Brazilian company reported net sales of 533.8 million Brazilian reais (106.3 million US dollars) in the first quarter of this year, which is a 5.3% decrease compared to the same period in 2025.

Despite lower selling expenses, margins were under pressure during the quarter due to lower revenue per pair, weaker operating leverage and a higher relative weight of manufacturing costs.

So, in the first quarter of the current fiscal year, its EBIT fell by 13.1% year-on-year to 41.6 million Brazilian reais (8.3 million US dollars), with the EBIT margin narrowing from 8.5% to 7.8%. Adjusted EBIT fell by 38.8% to 59.1 million Brazilian reais (11.8 million US dollars), with the adjusted EBIT margin contracting from 18.0% to 11.9%.

Ultimately, Grendene’s net profit decreased by 9.9% year-on-year in the first quarter, falling to 102.1 million Brazilian reais (20.3 million US dollars). Meanwhile, adjusted net profit declined by 23.6% year-on-year to 122.1 million Brazilian reais (24.3 million US dollars).

“Operating in a still challenging consumer environment, the Company remains focused on product mix and channel management, operational efficiency, and brand strengthening, while maintaining strategic consistency and preserving its ability to adapt and execute across market cycles”, concluded the company.

1 BRL = 0,20 EUR

Image Credits: melissaonlineshop.com

Brazil Footwear Grendene Quarter Results Results