Brazil-based Alpargatas reported that sales in the first quarter grew 12.5 percent to Brazil Real $1,229.5 million ($251 mm). Overall volumes reached 61.5 million pairs, up 8.4 percent year over year. The gains reflect earlier sell-ins in its core Brazilian market and a shift in the U.S. from a direct to a distributor model.

EBITDA grew 47.3 percent to $BRL299 million. Adjusted EBITDA  climbed 45.4 percent to $BRL299.5 million. Consolidated gross margin reached 53 percent, expanding by 1.5 percentage ponts compared to the previous year

Alpargatas wrote in its earnings press release, “It is worth highlighting that, in this quarter, we achieved a record gross margin for a first quarter, mainly driven by the positive scale effects in Brazil and the favorable exchange rate impact compared to the same quarter of the previous year. Furthermore, it is important to reinforce that short-term fluctuations in commodity prices do not change the company’s medium and long-term outlook, in which we believe we are naturally hedged by the ability to implement gradual price adjustments to restore margin balance.”

Brazil’s Sales Expand 14 Percent
Net sales in Brazil reached R$909 million, up 3 percent. In Brazil, pairs reached 54.9 million, up 7.6 percent. Sell-out growth was 4 percent. Alpargatas saw a 5 percent increase in revenue per pair, mainly driven by a different channel mix compared to 1Q25.

Alpargatas said in its statement the growth in part reflects a shift to focus on sell-in during the first quarter.  The company said, “It is important to highlight that part of this growth is related to a tactical decision to accelerate sales in Brazil, similar to the approach adopted in the previous year. This strategy aims to adequately supply the channel in preparation for the collection changeover that takes place in the second quarter, thereby seeking to avoid market share losses that we have historically observed during this period. Specifically in the quarter, our sell-in volumes accelerated relative to sell-out, without changing our outlook for the expected growth trajectory for the year. By considering sell-out as the main driver of commercial decisions, the company adopts a diligent approach to channel inventory composition, ensuring adequate availability and protection of market share, especially during strategic moments such as collection transitions or seasonal peaks. From a last twelve months perspective, we continue to maintain a good balance between sell-in and sell-out.”

EBITDA in Brazil was R$237 million, rising 37 percent. Gross margin in the quarter in BrazIl was 49 percent, and EBITDA margin reached 26 percent (22 percent in Q125), representing the highest margin levels ever recorded by the company in a first quarter. Alpargatas said the margin performance reflects a combination of scale gains, higher manufacturing productivity, greater distribution efficiency, and SG&A efficiency.

International Sales Expanded 22 Percent on Currency-Neutral Basis
Havaianas International net sales reached R$308 million in the quarter, up 10 percent on a reported basis and 22 percent on a currency-neutral basis. The gains in part reflect a change in the business model in North America in January 2026 from a direct to a distributor model through a partnership with Eastman Group.

In the U.S., sales reached R$50 million, up 22 percent. Pairs totaled 1.2 million, up  161.4 percent. Alpargatas said, “In the United States operation, 1Q26 reflects the first results under the new business model, not only in terms of volumes and revenues, but also in profitability. It is worth noting that under the new business model, revenue per pair in the United States naturally declines due to the dynamics of distributor intermediation in sales to customers. On the other hand, the expenses allocated to the operation are significantly reduced and weigh less on results. This represents the first step in a year that remains one of transition, in which early signs are favorable and promising.”

Europe’s sales totaled R$204 million, up 15 percent. Alpargatas said, “In Europe, we were able to significantly improve our execution and delivered a quarter of strong volume growth. In total, 3.5 million pairs were sold, representing an 18 percent increase compared to the same quarter of last year, with sell-out also showing a solid growth pace. We ended the quarter with a good inventory composition across channels and confident in our execution during the second quarter seasonality, which is the most relevant period for this operation. Volume growth in the European operation is a central factor in our recovery of scale and margins in the international business.”

In IDM (international distributor markets), sales were R$53 million, down 12 percent. Pairs totaled 2.0 million, off 17.4 percent. Volume of pairs sold in Asia and Latin America through IDM increased 50.5 percent, although not enough to offset the decline in volume observed in Israel, “due to the impact of geopolitical issues in that country.”

Consolidated gross margin of Havaianas International reached 62 percent, a decline of 3 percentage points due to the change in the business model in the U.S. EBITDA from the international operation totaled R$62 million in the quarter, up 89 percent, with an EBITDA margin of 20.2 percent (12 percent in Q125), reflecting the combination of the resizing of the U.S. structure, expense discipline across all geographies, normalization of marketing investments, and commercial discipline. Alpargatas said, “This result confirms the gradual evolution of the operation towards a more optimized and profitable structure in the medium and long term.”

Rothy’s Profits Dragged Down By Tariffs
In 1Q26, Rothy’s, the San Francisco-based eco-friendly footwear brand, recorded revenue of US$47 million, an increase of 8 percent. Gross margin reached 56 percent, a 5 percentage-point decline, mainly due to a 4.8 percentage-point negative effect from importing products from China throughout 2025, still under the effect of import tariffs. Despite the pressure on gross margin, Rothy’s was able to maintain expense control and reported EBITDA over the last twelve months of U.S.$15 million, down from US$20 million a year ago, with an EBITDA margin of 5 percent against 10 percent a year ago. EBITDA in the first quarter was US2.2 million, down from US5.2 million a year ago.

Alpargatas owns a 49.9 percent stake in Rothy’s.

Outlook
Alpargatas said, “We started 2026 confident in our defined strategy and in the Company’s ability to continue delivering consistent results. The progress observed throughout 2025 and reaffirmed in 1Q26 demonstrates that Alpargatas now operates at a new level of maturity, efficiency, and discipline. In Brazil, we will remain focused on sustainable expansion, preserving leadership in the grocery channel and continuously improving our execution in specialized channels. In the international environment, we remain focused on the gradual recovery of volumes, the consolidation of the new business model in the United States, and the strengthening of the brand across key geographies.

“We also reinforce our confidence in our pricing strategy, aligned with consumers’ purchasing power, combined with the continuous evolution of product and channel mix as drivers of brand value. With a solid financial foundation, discipline in capital allocation, and a focus on operational excellence, we will remain attentive to the environment and committed to advancing consistently, strengthening our operations and sustainably expanding the global relevance of our business.”

Image courtesy Havaianas