World Footwear

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Owner of Melissa and Ipanema delivers weak third quarter performance

Nov 10, 2023 Brazil
Owner of Melissa and Ipanema delivers weak third quarter performance
The Brazilian Grendene posted a revenue decline in the third quarter of 2023, as unfavourable domestic macroeconomic conditions and the global economic slowdown continue to impact consumer demand
“The accumulated inflation, high interest rates, household indebtedness, and low consumer confidence that remained unfavourable domestic macroeconomic conditions, in conjunction with the global economic slowdown, continued to have an effect on the purchasing power and behaviour of consumers, particularly those with lower purchasing power, thereby influencing the sales dynamics of the company”, reads the company’s release.

Third Quarter Results

In the third quarter of the current year, Grendene’s gross revenue declined by 7.4%, as compared to the same period of 2022, totalling 842.3 million Brazilian reais (159.8 million euros), due to a negative pressure of demand. The company also said that 41.1 million pairs were shipped in total in this quarter, which reflects a 7.2% decrease year-over-year, while gross revenue per pair remained stable at 20.50 Brazilian reais.

Its domestic gross revenue was down by 5.5% in the three months to the end of September, reaching 698.5 million Brazilian reais (132.6 million euros), on a comparable basis to the same quarter of last year, thanks to an 8.2% reduction in the volume of pairs distributed and a 2.7% increase in gross revenue per pair. In addition, the company’s international gross revenue amounted to 143.8 million Brazilian reais (27.3 million euros), declining by 14.8%, as compared to the same period of the prior year.

Grendene recorded net sales of 689.1 million Brazilian reais (130.8 million euros) in the third quarter of the year, down by 3.5% on a comparable basis to a similar period in 2022, “less than the decrease in gross revenue, owing mostly to lower returns and discounts in the domestic market”.

However, in the three months to the 30th of September, the company’s gross profit increased by 10.2% year-over-year to 313.4 million Brazilian reais (59.5 million euros), with the gross margin improving accordingly from 39.8% to 45.4%, due to the fall in raw materials prices.

At last, the company posted a net profit of 134.3 million Brazilian reais (25.5 million euros) and a recurring net profit of 164.0 million Brazilian reais (31.1 million euros) in the third quarter of fiscal 2023, which indicates a decline of 22.9% and 17.4%, respectively, as compared to the third quarter of 2022.


Image Credits: elle.com

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