Release Date: February 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Grendene SA (BSP:GRND3, Financial) reported a 12% growth in gross revenue for the fourth quarter of 2024 compared to the same period in 2023.
- The company's recurring EBIT saw a robust growth of 38.8%, reaching BRL217.6 million, with a margin increase of 4.7 percentage points.
- Melissa brand continued its positive trajectory with a 16.7% increase in revenue and a 3.4% growth in volume.
- Exports showed strong performance with a 31.9% increase in revenue and a 12.8% growth in volume, outperforming the general Brazilian footwear export market.
- Grendene SA maintained a consistent history of profitability, with positive results in 80 out of 81 quarters since becoming a public company.
Negative Points
- Division 1 brands experienced a 10.7% decrease in sellout during the fourth quarter, impacted by high inflation, interest rates, and exchange rate volatility.
- The female collections, particularly Zaxy, underperformed compared to the previous year, affecting overall brand performance.
- The external market faced challenges due to political and economic crises in key export countries, leading to increased protectionism and logistical issues.
- The company's COGS increased by 6%, which would have been higher without tax incentives, indicating pressure on production costs.
- Grendene SA's partnership with 3G Radar ended due to differing investment timelines and lower-than-expected sales, highlighting challenges in international expansion.
Q & A Highlights
Q: What can we expect from COGS in 2025, and what went wrong with the GGB?
A: Alceu De Albuquerque, CFO, explained that COGS in 2025 should remain aligned with 2024 levels. Regarding GGB, he clarified that nothing went wrong per se, but the different investor profiles led to 3G Radar's exit. Grendene remains committed to the long-term strategy, focusing on building global brands like Melissa, and has made adjustments to improve profitability.
Q: Can you elaborate on the performance of Division 1 brands and Melissa in the domestic market?
A: Alceu De Albuquerque noted that Division 1 brands saw a 6.4% growth in gross revenue despite a challenging market. Melissa continued its positive trend with a 16.7% revenue growth, driven by strong sellout performance and effective marketing strategies.
Q: How did Grendene perform in the international market amidst global challenges?
A: Alceu De Albuquerque highlighted a 31.9% growth in export revenue, with volume increasing by 12.8%. This was achieved despite global economic uncertainties and increased competition, showcasing Grendene's strong export strategy.
Q: What were the key financial highlights for the fourth quarter of 2024?
A: Alceu De Albuquerque reported a 12% increase in gross revenue, reaching BRL1.043 billion. The gross profit grew by 20.6%, and the recurring EBIT saw a robust growth of 38.8%, reflecting effective cost management and operational efficiency.
Q: How is Grendene's e-commerce channel performing?
A: Alceu De Albuquerque stated that e-commerce showed a 25% growth in GMV, with a 9% increase in transactional volume. The channel now represents 6.4% of Grendene's domestic market sales, indicating a successful digital strategy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
