Vulcabras shares (VULC3) recorded a strong rise in the wake of the release of the results. The owner of Olympikus and the Under Armor and Mizuno license saw its profit triple in the second quarter of 2022 on an annual comparison basis, at R$95 million. The shares rose 4.27%, to R$ 11.47, after reaching an advance of about 7% in the high of this Friday’s trading session (29). In the year, the accumulated gains are around 25%.
The company’s revenue jumped 64.4% to R$656.8 million, a company record – mainly supported by volume growth (up 46% year-on-year) in both footwear and apparel and accessories and a better price. /mix in these categories.
Looking at channels, the domestic market remained strong, with revenue up 60.5% year-on-year, XP points out, while exports also continued to evolve, with revenue more than doubling versus Q2 2021.
“As for profitability, although the company continues to face challenges in the face of cost inflation and higher freight rates, was able to deliver gross margin and Ebitda expansion [lucro antes de juros, impostos, depreciações e amortizações] of 1.9 percentage point [p.p.] and 2.1 pp on an annual basis, respectively”, they assess. XP points out that the number is the result of efficiency gains in production (idle capacity running at very low levels) and operational synergies between the brands. The house’s analysts reiterate a buy recommendation and a target price of R$12 per share, or a 9% upside potential compared to the previous day’s closing.
Guilherme Domingues, retail analyst at Eleven, points out that Vulcabras reported a robust result and slightly above its expectations, with record net revenue in a single quarter and expressive growth in profitability.
Due to its strong operating leverage, as well as being the first quarter in which 100% of Mizuno’s new collections were produced by the company, the Ebitda margin (Ebitda over net revenue) increased 2.2 points on an annual basis. The stock’s recommendation is to buy, with a target price of R$18, or a 64% upside potential compared to Thursday’s close.
Bradesco BBI highlights the higher-than-expected revenue driven by the good performance of the clothing and “other” categories (female flip-flops, boots and shoes). That said, volume growth in the athletic shoe category was also strong (up 27% year-on-year).
While Mizuno’s acceleration plays a big role in this, Under Armor has also come in strong, and Olympikus is growing as Vulcabras taps into the high-performance running market with new releases like the Corre Graphene, analysts reckon.
The higher volumes, which allow factories to operate at full capacity, along with the fact that Mizuno is now fully adapted to the company’s production process, should support margins in the coming quarters, they add.
“Considering the 20% rise in stocks (compared to the 23% decline in retailers overall) year-to-date [até o fechamento de quinta-feira] we have clearly been very cautious with the stock, which has shown very strong dynamics in its results. That said, we expect to see this slow pace through the remainder of the year, given Mizuno’s expansion into 2021 (meaning the base becomes higher throughout the year).”
Thus, BBI maintained a neutral recommendation, but raised the target price for the end of 2022 from R$11 to R$12
12 (from R$11) due to higher estimates. “In the Clothing & Footwear space, we prefer Renner (LREN3), where we see greater upside potential (+46% versus +9% for Vulcabras) and attractive valuation”, he points out.