Grendene (GRND3) Q4 2024 earnings summary

Executive summary

• Fourth quarter of 2024 saw robust growth in revenue, profit, and margins, with gross revenue reaching R$1,043.5 million (+12.9% YoY), recurring EBIT up 38.8%, and recurring net profit up 35.5%, despite challenging domestic and international environments.

• Full-year 2024 gross revenue was R$3.2 billion (+7.5%), with recurring EBIT at R$508.4 million (+33.3%) and recurring net profit at R$796.5 million (+20.5%).

• Export markets delivered a 31.9% revenue increase and 12.8% volume growth, outperforming the broader Brazilian footwear export sector, which saw a decline.

• Domestic market performance was mixed, with Division One brands and Melissa brand showing strong sell-in and sellout growth, while overall domestic consumption was affected by reduced store traffic and increased competition.

• Operational efficiency, cost management, and a favorable product mix drove margin expansion and profit growth despite macroeconomic and industry challenges.

Financial highlights

• 4Q24 net sales revenue was R$859.4 million (+13.0% YoY); gross margin improved by 3.2 pp to 50.9%.

• Recurring EBIT margin for 4Q24 was 25.3% (+4.7 pp YoY), and recurring net margin was 40.4% (+6.7 pp YoY).

• 2024 recurring EBIT margin reached 19.3% (+3.6 pp), and recurring net margin was 30.3% (+3.1 pp).

• Net cash position at year-end was R$1.5 billion (+32.3% YoY); operating cash flow was R$702.7 million.

• Capex in 2024 totaled R$187.4 million (+52.5% YoY), focused on modernization and efficiency.

Outlook and guidance

• 2025 expected to begin with cautious retail consumption and slower customer repurchases; focus remains on supply optimization, channel integration, and cost control.

• Management remains focused on long-term brand building and international expansion, especially for Melissa.

• Adjustments in GDB structure aim for slower but more profitable growth.

• Rising protectionism, currency restrictions, and intensified Asian competition are expected to persist.

• Continued emphasis on operational efficiency and market competitiveness to sustain performance.