Alpargatas is reporting that its Havaianas brand posted growth of 9.5 percent (+8.2 percent cc) to R$1.0 billion in the second quarter. This performance was said to be driven by Havaianas Brazil, which has a shorter business cycle compared to the International operation, and commercial execution already reflects the improvements made, showing clearer signs of normalization. In the international business, sales decreased by 7.6 percent, mainly impacted by the geographic sales mix, with lower volumes sold in Europe and increased relevance of Distributor Markets. This also affected the net sales per pair, which fell by 8.1 percent cc year-over-year.

The company reported that 52.7 million pairs were in the second quarter and 105.0 million pairs were sold in the first half, showing a year-over-year growth of 17.4 percent and 12.8 percent, respectively. The commercial execution improvements in Brazil and the beginning of normalization in international markets, especially in countries served via distributors, reportedly contributed to this year-over-year growth.

Havaianas Brazil
Net sales grew by 21.6 percent, driven by a 21.5 percent increase in volumes sold. The company reported that 45.0 million pairs were sold in the quarter and 90.5 million pairs in the six-month period of 2024, marking year-over-year growth of 21.5 percent and 16.5 percent, respectively.

The company said it continues to observe that the sell-in and sell-out volumes, in number of pairs, are closely aligned, especially when comparing the accumulated numbers for the semester. This balance is partly a reflection of the completion of the de-stocking process in the chain and the stabilization of sell-out, as well as greater control by the company over commercial processes.

In the second quarter, the estimated sell-out for Havaianas Brazil was 3 percent higher compared to the year-ago Q2 period. The company recorded the smallest gap between sell-in volumes and sell-out volumes, since the end of 2022, in number of units sold. This reconnection between sell-in and sell-out volumes is due to strong performance across all channels, as well as improvements in operational execution and service levels.

Havaianas International
Net sales decreased by 10.2 percent cc year-over-year in the quarter, primarily impacted by the lower sales volumes in Europe. Net sales per pair dropped by -8.1 percent in CC this quarter due to the mix of geographies and products sold.

The volume sold in the quarter was 7.6 million pairs, a decrease of 2.2 percent compared to 2Q23. For the first half, the drop was 5.9 percent, totaling 14.5 million pairs. Despite the decline in international operations volume, there is a sequential reversal in the year-over-year rate.

Breaking down the international results by region, Distributor Markets saw an 8.7 percent increase in volumes sold, indicating that the destocking process is nearing its end. The U.S. experienced a 3.3 percent growth in the quarter, driven by higher sales volumes in off-price channels, while EMEA continued to show a negative volume of 8.2 percent, impacted by sell-out still below the region’s potential but in line with the company’s expectations.

Image courtesy Alpargatas