By Brazil Stock Guide – Alpargatas reported a sharp rebound in profitability in the fourth quarter of 2025, posting net income of R$197 million, compared with just R$2 million in the same period a year earlier, as margins recovered and the Havaianas business regained momentum both in Brazil and abroad. The footwear group closed the year with net income of R$567.9 million, the highest in its history.
Revenue in the quarter reached R$1.26 billion, up 11.8% year over year, supported by stronger international sales and a better product mix in Brazil. Gross profit nearly doubled to R$633 million, while adjusted EBITDA climbed to R$211 million, more than five times higher than a year earlier. Gross margin rose to 50.4%, from 33.3% in the fourth quarter of 2024, reflecting improved operational efficiency and the normalization of inventory effects that weighed on the previous year’s comparison.
Domestic engine
Brazil remained the core driver of the turnaround. The company sold 60.8 million pairs of Havaianas in the domestic market during the quarter, slightly below the prior year, but stronger pricing and channel mix helped push revenue higher. For the full year, Brazilian revenue reached R$3.4 billion, up 10%, with EBITDA of R$824.7 million and a margin of about 24%.
Management attributed the performance to disciplined pricing, stronger product mix and gains in manufacturing and logistics efficiency. Consumer demand also strengthened: sell-out — the sell-through at retail — rose 8% in the quarter, suggesting improving demand even as the company kept sell-in volumes controlled to avoid excess inventory.
Margins reflected that improvement. Brazil’s gross margin reached 50.9% in the quarter, the highest ever recorded by the company in a single quarter.
A marketing campaign also placed the brand at the center of political debate. The Havaianas year-end campaign for 2025/2026 featuring actress Fernanda Torres triggered strong backlash from some conservative consumers and right-wing politicians.
In the video, Torres suggests that people should not begin 2026 “with the right foot,” as the expression goes in Portuguese, but rather “with both feet,” a phrase that critics interpreted as a political message and that sparked calls for boycotts on social media.
International rebound
The international operation, which had weighed on results in recent years, also began to show signs of recovery. Sales abroad rose 45% year over year in the quarter, reaching R$184 million, with stronger performance across Europe and distributor markets. International volumes increased 82%, totaling 5.7 million pairs.
The United States posted the strongest growth, with volumes up more than 300%, largely reflecting the initial inventory build linked to a new distribution partnership with Eastman that is scheduled to start operating in 2026.
Although the international division still reported a quarterly EBITDA loss of R$42 million, the annual result turned positive at R$42.1 million, marking the first profitable year for the segment since 2022.
Margins and capital discipline
For the full year, Alpargatas delivered revenue of R$4.56 billion, an increase of 11%, while adjusted EBITDA reached R$865 million, more than doubling from 2024. Gross profit rose 34%, reflecting operational improvements and the absence of inventory write-downs that distorted the prior year comparison.
The company also returned more than R$1.2 billion to shareholders through dividends and capital reductions during 2025. After the payout, leverage remained moderate at roughly 0.8x net debt to EBITDA, suggesting a still conservative capital structure.
Management says the company is entering a new corporate cycle following several years of restructuring — combining stronger profitability in Brazil with the early signs of a renewed international expansion for the Havaianas brand.
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