Azzas 2154: Q4 result highlights revenue growth and strategic adjustments

Following the merger between Arezzo & Co and Grupo Soma in February last year, the newly formed Brazilian fashion giant Azzas 2154 reported fourth quarter gross revenue of 4.2 billion Brazilian real, up 15.1 percent versus the same period in 2023. The results reflect three months of consolidated
operations.

During the second half of 2024, the company’s portfolio was reviewed and brands that did not show returns or that maintained low cash generation were discontinued. This adjustment cost the company around 243 million Brazilian real.

“Looking at the current business landscape, we see strong demand, with positive sell-in trends that are, for now, within our expectations. However, despite our primary exposure to an affluent consumer base and our limited reliance on credit concessions, a persistently high benchmark interest rate, combined with uncertainty regarding the future of the interest rate curve, reinforces our decision to prioritise cash generation,” said CEO Alexandre Birman.

Azzas 2154 Q4 margins decline

Across the company’s portfolio, Democratic Clothing increased by 17.6 percent, driven by B2B, Women’s Clothing rose 22.9 percent, driven by the Farm brand and Men’s Clothing grew 20.7 percent during the quarter under review.

The recurring gross margin was 55.5 percent, representing a decline of 0.6 percent compared to the same period in 2023. This result was impacted by the normalisation of men’s clothing inventories and the acceleration of sales of discontinued brands.

Recurring EBITDA was 443 million Brazilian real, indicating an increase of 4 percent compared to the fourth quarter of 2023.

Less net profit compared to expenses

Recurring net income was 169 million Brazilian real, with recurring net expenses increasing by 0.7 percent when compared to the same period in 2023.

The company explains that the year 2024 was one of preparation, organisation and planning, while 2025 will be one of efficiency and profitability.

Azzas 2154 shares were down approximately 9 percent annually, while the company’s market value stood at 5.5 billion Brazilian real.