Brazilian Fashion Group Azzas 2154 Reports 35.8% Profit Decline in Q4 2024

Azzas 2154 reported a recurring net profit of R$168.9 million ($28 million) for the fourth quarter of 2024, representing a 35.8% decrease compared to the same period in 2023, according to financial results released Tuesday.

The company, formed through the merger of Arezzo&Co and Grupo Soma, posted a recurring EBITDA of R$519.2 million ($87 million), up 4.1% year-over-year, though the EBITDA margin contracted from 16.6% to 15.3%.

This performance concludes a transformational year for the fashion conglomerate. Full-year sales reached R$8.38 billion ($1.397 billion), a 72.9% increase from 2023, while annual net income fell to R$341.73 million ($57 million) from R$399.4 million ($67 million).

The company successfully accelerated its consolidated growth rate to 15.1% in Q4 compared to 12.1% in Q3. Three of its four business units grew above 17.0% in the quarter, highlighting the strength of its diversified portfolio.

“Our main strategic priority for 2025 will be to improve operational efficiency and optimize capital allocation,” stated the company. Management aims to focus on projects with higher internal returns while maximizing cash generation.

The R$5.9 billion ($983 million) merger completed in May 2024 created Brazil‘s largest fashion platform, overseeing 34 brands across four segments. However, the company faces integration challenges, particularly in merging distinct corporate cultures.

Alexandre Birman, former Arezzo chief and current CEO, holds an 11.3% stake as the largest individual shareholder. Roberto Jatahy, former Grupo Soma founder who leads the women’s clothing division, maintains a 4.4% stake.

Despite near-term challenges, analysts remain optimistic about Azzas 2154’s future. Market forecasts project earnings growth of 22.9% annually and revenue growth of 17.1% through 2027.

The company recently approved a R$149 million ($25 million) share buyback program, signaling confidence in its long-term growth trajectory.

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