Brazil-based Alpargatas reported sales grew 17.5 percent in the first quarter, with healthy growth for Havaianas in Brazil and at Rothy’s. On a constant-currency (cc) basis, Havaianas sales in the U.S. increased slightly but declined in Europe and distributor markets.
Alpargatas’ total sales reached Brazil Real $1.08 billion ($191.4 million). EBITDA expanded 92.9 percent to R$207.3 million. Gross margins improved 570 basis points to 51.1 percent. Volume increased 10.1 percent to 56.7 million.
Alpargatas cautioned that the volume growth reflects a tactical decision to accelerate sell-in in Brazil to prevent market share losses that have historically occurred during the first quarter. As a result, Alpargatas said sell-in volumes outpaced the sell-out performance, which grew approximately 2 percent in 1Q25 versus 1Q24. Gains in coming quarters will likely be less as inventories are rebalanced. Alpargatas said, “We continue to believe in maintaining sell-in levels, on average, aligned with sell-out, keeping our commercial efforts primarily focused on stimulating end-consumer demand.”
Havaianas Brazil Sales Leap 22 Percent
Havaianas Brazil sales increased 22.4 percent to R$803.0 million, driven by a 14.0 percent increase in volumes, reflecting the aggressive sell-in efforts and a 7.4 percent expansion in average price per pair, supported by a more favorable channel mix. Sell-out grew 2 percent in the quarter.
Alpargatas said Havaianas Brazil has seen sell-out expand in its franchises and owned stores (DTC), in the specialized retail channel, and the grocery segment, but it was not enough to offset the decline in sell-out observed in the traditional channel, which remains the most relevant for the brand’s sales.
EDITDA for Havaianas Brazil jumped 91.7 percent to R$174.3, with EBITDA margin improving 780 basis points to 21.7 percent, among the strongest first-quarter results in recent history. Alpargatas noted that the 1Q24 comparison for Havaianas Brazil is distorted by inventory write-offs recorded in that period. On a comparable basis, 1Q25 EBITDA would have grown 65.7 percent year-over-year (y/y), with a 5.7 percentage point margin expansion. The performance reflects a combination of volume-driven scale gains, improved commercial dynamics, cost optimization, and strict control over operating expenses.
Havaianas International Sees Decline in Europe and Distributor Markets
Net sales from the international operation grew 5.2 percent in the quarter, reaching R$279.0 million, supported by the average exchange rate for the period, which increased approximately R$0.83 per U.S. dollar between 1Q25 and 1Q24. On a constant currency (CC) basis, sales declined 9.9 percent versus 1Q24. Revenue per pair increased 25.0 percent in reported currencies, or 7.1 percent on a cc basis.
In the U.S., sales of the Havaianas brand grew 17.3 percent in the first quarter on a reported basis and 0.6 percent in constant currency (CC) to R$41 million. The improvement was driven by a more premium product mix sold during the quarter, resulting from lower volumes in the off-price channel.
U.S. volume in the quarter declined 180 thousand pairs, or 28.3 percent, to 0.5 million pairs due to lower sales to off-price channels. With the deemphasis on off-price selling, revenue per pair in the U.S. region rose 63.5 percent y/y on a reported basis and 40.1 percent on a cc basis.
Sales in the European market reached R$177.3 million, up 4.7 percent (down 1.3 percent cc) versus 1Q24. Revenue per pair reached R$60.2, growing 9.5 percent (-6.3 percent cc) compared to 1Q24. The decline reflects portfolio adjustments that came into effect this year, addressing pricing and product mix across the region’s different channels.
The timing of Easter, which occurred later this year, resulted in a decline on a cc basis in Europe. Alpargatas said Europe “successfully delivered the pre-order volumes at the beginning of the season, ensuring that customer shelves were stocked ahead of Spring — a key enabler for sell-out growth and potential replenishment as we move through the high season.”
Sales in the International Distributor Markets (IDM) – including Africa, Latin America, Asia, the Middle East, and the Pacific – declined 20.7 percent (-32.0 percent cc) to R$60 million. Sales were impacted by inventory destocking in the APAC region and price adjustments in several Latin American countries. Alpargatas said, “Despite the drop in revenue, we continue to prioritize profitability and the standardization of commercial policies in these regions, translated into some level of margin expansion already observed in this 1Q25.”
Havaianas International’s EBITDA grew 99.0 percent to R$33.0 million, marking the first year-over-year growth for a first quarter in the segment since Q121. The improved performance reflects the company’s continued efforts to rebuild its international operations through portfolio adjustments, cost optimization, and reduction of non-essential expenses, alongside scale recovery in Europe and increased profitability across all markets.
Rothy’s Q1 Sales Jump 27 Percent
Rothy’s, the eco-conscious footwear brand based in San Francisco, reported sales climbed 26.6 percent to U.S.$43.4 million. The gains were driven by the launch of new products with strong commercial performance, as well as increased penetration in physical stores and the B2B channel.
Rothy’s EBITDA reached $800,000 against a loss of $1.5 million a year ago. The improved profit performance for Rothy’s reflects stable margins due to ongoing improvements in manufacturing, production efficiency gains, freight cost optimization initiatives implemented throughout 2024, and expense disciplines.
Alpargatas said U.S./China tariff developments did not impact Rothy’s in the first quarter. The company said Rothy’s “believes it holds sufficient safety inventory to support sales through the second quarter, while actively exploring alternatives to diversify its sales channels and supply chain. Protecting margins and ensuring customer service remain top priorities at this stage.”
Image courtesy Havaianas
