In This Article:
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Net Cash Position: Achieved a net cash position with a positive cash generation for the seventh consecutive quarter.
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CapEx: Total CapEx for 2024 was approximately BRL 160 million, a reduction of over 70% from 2022 levels.
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Inventory Write-Off: Significant inventory write-off in 2024, including BRL 60 million for flip-flops and BRL 136 million for Beyond the Core products.
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Revenue Growth: Revenue increased by 9% compared to the previous year.
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Gross Margin: Achieved a gross margin of 48%, a record result in recent years.
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EBITDA Margin: Improved EBITDA margin, reflecting increased productivity and efficiency.
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International Sales: Net sales grew by 11% in the quarter, with EMEA and North America showing volume increases of 10% and 29%, respectively.
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Rothy's Performance: Rothy's achieved a turnaround from a loss of $29 million to a surplus of $20 million, with a 20% increase in net sales for the year.
Release Date: February 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Alpargatas SA (BSP:ALPA3) achieved significant progress in operational efficiency, reducing product costs and improving factory and distribution efficiency.
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The company maintained a net cash position and controlled costs, demonstrating strong financial discipline.
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Alpargatas SA gained market share in modern channels and saw a 21% growth in sales in the men's collection.
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Rothy's, a previously underperforming asset, contributed positively in 2024, showing a turnaround in performance.
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The company successfully reduced its portfolio by 50%, focusing on core products and improving inventory management.
Negative Points
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Alpargatas SA faced elevated write-offs from past collections, impacting inventory levels and financial results.
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International performance remained weak, with sales not recovering from declines in previous years due to lack of brand investment and distribution challenges.
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The company experienced a contraction in international market volumes, affecting its exchange rate neutrality.
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Despite improvements, the EBITDA margins in international markets remained negative, indicating ongoing challenges.
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The company still faces challenges in converting high brand awareness into sales in the US market, requiring a revised distribution strategy.
Q & A Highlights
Q: Can you explain the process of inventory liquidation and its impact on the Beyond the Core strategy? A: Liel Miranda, CEO, explained that the inventory liquidation involved selling through channels with higher margins, culminating in a major Black Friday campaign. The remaining unsellable inventory was written off. The focus remains on core products, with Beyond the Core being complementary. The strategy is to grow the core business, particularly flip-flops, both domestically and internationally.