Havaianas owner Alpargatas‘ back-to-basics strategy has become a cash-generative model that can grow its flip-flops both domestically and overseas.
Pedro Baptista, the Jefferies equity analyst for apparel, footwear and textiles in Latin America, noted in January that the Alpargatas overhaul included a full operational reintegration across production, logistics, digital, marketing and its global footprint. Last year, Alpargatas also shifted its operating model for Havaianas in North America, inking a distribution deal with The Eastman Group for its flip-flops for the U.S. and Canada and moving it from direct operation to distribution. He also sees the possibility of a potential monetization of its stake in shoe brand Rothys.
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The analyst noted that the Sao Paulo-based Alpargatas reported fourth quarter 2025 EBITDA (earnings before interest, taxes, depreciation and amortization) of 178.7 million Brazilian real versus a marginal loss in the same quarter in 2024.
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“Brazil delivered a notable acceleration in sell-out, particularly in Q4, with growth of 8 percent in the quarter and 4.8 percent for the year, despite a challenging consumer macro backdrop,” Baptista said, noting that sell-in growth was intentionally lower than sell-out. That enabled inventory deleveraging of 1 million pairs over the course of the year. Moreover, gross margin in Brazil reached 51 percent in quarter and 48 percent for the full year, both of which he noted were all-time highs that were “driven primarily by premium mix, operational efficiency, and improved manufacturing performance, rather than price increases.”
He also noted a continued turnaround internationally, particularly in Europe, which recorded high single-digit growth and strong margin recovery that was supported by brand re-energization and better execution. In addition, the U.S. market under its new Eastman distribution partnership that launched operationally this past January is expected to structurally reduce costs and unlock future growth, the analyst said. Moreover, distribution markets in Africa, Asia and the Middle East improved execution, reduced excess inventory and delivery higher profitability.
The gap between strong brand recognition and market share “will gradually narrow,” in our view, Baptista said.
The analyst said that the company is now focused on simplification and efficiency with its new management team, “expecting to achieve a better balance between price, volume, and cost dynamics.”
Alpargatas in March 2025 named Gigi Hadid as Havaianas’ global brand ambassador. And in September 2025 for Copenhagen Fashion Week Spring-Summer 2026, Havaianas released its first-ever 3D-printed flip-flop in collaboration with Zellerfeld.