Brazil’s Vulcabras reported sales increased 5.1 percent to R$761 million ($136 mm) in the second quarter, with growth across its Olympikus, licensed Mizuno and Under Armour brands.

Earnings rose 0.5 percent to R$139.7 million on a reported basis. Recurring income rose 4.4 percent to R$139.7 million, with a recurring net margin of 18.4 percent.

Gross margins in the quarter were 42.5 percent, an increase of 110 basis points.

Revenue from the athletic footwear category was R$644.6 million, growing 6.0 percent year-over-year and representing 84 percent of the company’s total revenue. This was due to the increased sales of its three brands, driven by growth in the domestic market and partially overshadowed by the reduction in sales in the foreign market.

Vulcabras said Olympikus, its flagship brand, “continues to expand strongly, with growth in average price driven by Corre Family products, which democratizes high performance with innovations and technology 100 percent Made in Brazil.”

The company continued, “This quarter, the Corre Supra, the super shoe Made in Brazil, won 12 podiums in its official debut at the São Paulo International Marathon. With the QU4DRA BR1, shoes co-created with the Brazilian volleyball team’s setter, Bruninho, the brand returns to the volleyball courts and is present on the athlete’s feet during this year’s Olympics.”

The licensed Mizuno range expanded into performance running with the Mizuno Neo Vista, a new shoe category focused on speed training.

The Under Armour range continues to expand in basketball and training, with three new drops from the Curry Brand and UA Wish. In training, the UA Tribase Lift continues to gain space inside and outside gyms.

Other Footwear and Others category decreased by 2.6 percent to R$52.6 million due to a drop in the professional boots category, mitigated by the flip-flops category growth.

Apparel and Accessories category sales increased 3.1 percent to R$63.8 million. Vulcabras stated, “The category continues to face a challenging retail scenario, especially in specialized distribution. The growth of this category was predominantly due to the greater penetration of online sales.”

Overall, e-commerce recorded revenue of R$98.7 million in the quarter, an expansion of 72.9 percent compared to the same period of the previous year. Digital sales accounted for 13.0 percent of the company’s total net revenue, up 5.1 percentage points compared to the share recorded in 2Q23.

By region, revenue in the domestic (Brazilian) market reached R$723.5 million, an increase of 8.6 percent compared to the same period in the previous year.

The company’s three brands recorded growth in the Brazilian market compared to the same period in 2023. During this quarter, athletic footwear, apparel, and accessories were the positive highlights, with growth in volume and revenue partially reduced by the decline in the professional boots category.

In the foreign market, net revenue reached R$37.5 million, a drop of 35.0 percent against year-ago levels. T

Athletic Footwear revenues incurred a strong impact from the decline in sales in Argentina, the company’s leading export destination. Vulcabras said, “Difficulties in domestic consumption and restrictions on remitting dollars abroad mean that the volume of business with Argentina remains far from its full potential.”

Vulcabras’ subsidiary in Peru also saw a reduction in revenue from continued macroeconomic disruptions in the country.

In the half, Vulcabras’ net revenue amounted to R$1.36 billion, up 4.9 percent year-over-year. Recurring net income reached R$139.7 million, up 4.4 percent year-over-year at a margin of 18.4 percent against 18.5 percent a year ago. Recurring EBITDA grew 4.0 percent to R$175.4 million, with a recurring EBITDA margin at 23.0 percent against 23.3 percent a year ago.

Photo courtesy Olympikus