Alpargatas lifts profit as international operations return to positive EBITDA

Brazilian footwear manufacturing group Alpargatas posted an 11.1 percent increase in consolidated net sales to 1.24 billion Brazilian reals (0.22 million dollars) for the third quarter of 2026, supported by volume expansion across its domestic and international footprints.

Consolidated gross profit grew 11.5 percent year-over-year to 653.2 million Brazilian reals, maintaining a steady gross margin of 52.7 percent. Net income for the period rose 2.4 percent YoY to 175.5 million Brazilian reals, bringing nine-month net earnings to 508 million Brazilian reals, a 37 percent advance over the prior year.

The group recorded an adjusted EBITDA of 283.5 million Brazilian reals, representing a 10.9 percent rise compared to the third quarter of 2025, with an adjusted EBITDA margin of 22.9 percent. Total volume reached 60.8 million pairs of footwear, up 7.6 percent YoY.

Domestic performance driven by product mix and retail channels

In the domestic market, flip-flop label Havaianas delivered net sales of 989.7 million Brazilian reals, up 13.5 percent YoY, alongside a 6.9 percent increase in volume to 55.2 million pairs. The performance was supported by market share gains of 2.7 percentage points in the grocery channel, which reached 79.9 percent, alongside gains across owned retail stores and franchise networks. Revenue per pair in Brazil advanced 6.2 percent to 17.9 Brazilian reals, reflecting an upgraded product portfolio.

The Brazilian unit recorded an EBITDA of 267.2 million Brazilian reals, up 3.3 percent YoY to deliver its highest nominal EBITDA on record. Gross profit in Brazil rose 16 percent to 497.6 million Brazilian reals, widening the division's gross margin by 1.1 percentage points to 50.3 percent. Domestic EBITDA margin softened by 2.6 percentage points to 27 percent, influenced by planned marketing outlays, higher freight and distribution expenses, and the reinstatement of payroll taxes.

International division returns to seasonal operating profit

Havaianas international operations generated net sales of 235.6 million Brazilian reals, up 2.3 percent YoY, while shipment volumes rose 14.6 percent to 5.6 million pairs. The overseas business returned to positive EBITDA during a third quarter for the first time in four years, reaching 16.6 million Brazilian reals and an EBITDA margin of 7.1 percent. Consolidated international gross margin expanded 1.2 percentage points YoY to reach 64.5 percent.

In Europe, volume expanded 12.8 percent to 1.8 million pairs, generating net sales of 125.8 million Brazilian reals, an increase of 13.9 percent YoY driven by channel mix and seasonal demand. In the US, volume rose 82 percent to 1 million pairs following the transition to a distributor business model, though net sales declined 29.6 percent to 33.4 million Brazilian reals due to the lower wholesale revenue recognition inherent in commercial intermediation. Distributor markets across Asia-Pacific, Latin America, and the Middle East and Africa delivered a 2.5 percent increase in volume to 2.9 million pairs, with revenue climbing 5.4 percent to 76.5 million Brazilian reals.

Rothy’s results

On the creative front, Havaianas rolled out its Exuberance Full of Brazil line and a football-inspired collaboration with KidSuper, whilst introducing the Kitten Heel sandal during European fashion weeks to expand international usage occasions.

American sustainable footwear brand Rothy’s, in which Alpargatas holds a 48.8 percent stake, recorded net sales of 50.9 million dollars, an increase of 12.3 percent YoY supported by wholesale expansion and retail openings.

The brand incurred a negative quarterly EBITDA of 2.2 million dollars and a net loss of 2.6 million dollars, weighed down by higher ocean freight rates, customs surcharges, marketing campaigns for the autumn collection, and store openings that took its physical footprint to 40 locations.