en.Wedoany.com Reported - Penalty sports brand has announced it will return to the Argentine market from 2027. In 2024, the brand withdrew from the home market of Messi due to high economic uncertainty in Argentina. The main trigger for this return is the labor reform promoted by Argentine President Javier Milei, which extends the weekly working hours to 48 hours, while Brazil, under the government of Luiz Inácio Lula da Silva, is considering reducing weekly working hours from 44 to 40 hours, with a related bill already passed in the lower house and under review in the Senate.
Roberto Estefano, Chairman of the Board of Cambuci and founder of Penalty, stated that considering the continuity of current local policies, the return to the market has been incorporated into the company's plans. He described the government measure as "very interesting" and believes Argentina is poised for a takeoff. With this change, production costs in Argentina will be lower than in Brazil. Estefano also said: "We are developing countries, not the first world. Those who work more earn more; there's nothing to argue about. China and Vietnam work hard and are growing. But Brazil is doing the opposite, shooting itself in the foot." Initially, the company is considering leveraging the liberalization of the Argentine market brought by Mercosur to import products from its three factories in Brazil (two in Bahia and one in Paraíba) into Argentina.
With market consolidation, it is expected to establish its own factory in Argentina around 2028, involving football and footwear production. During Penalty's peak in the Argentine market, the country contributed 10% of its total revenue. The company plans for the Argentine market to once again contribute 10% to 12% of total turnover after the return. Currently, the company only has one distributor in Argentina. Argentina, with a population of approximately 46 million, has a passion for sports, especially football, which is a significant factor in its market potential.
The founder of Penalty also does not rule out future expansion into Paraguay. The company previously had a garment processing plant there but moved production back to Brazil due to difficulties in color and fabric correction. Estefano believes that Paraguay has good labor, lower taxes, and cheap electricity, but this plan will take at least two to three years to materialize.
In Brazil, Estefano pointed out that the challenge lies in dealing with the cost increase impact from the reform of the working hours model. He stated that this change directly leads to a 10% increase in labor costs. The company, which employs about 2,500 people, has already implemented a 5x2 work schedule. Football products account for 40% of total production, footwear 30%, and apparel 30%. The company produces 3 million footballs annually in Bahia and plans to invest 30 million reais each year in new technologies and equipment. Despite the challenges, the company expects revenue to grow by 10% in 2026, with last year's revenue reaching 383.1 million reais.
In the first quarter of 2026, the company's net revenue was 99.2 million reais, up 1.3% year-on-year; net profit was 19.7 million reais, up 3.1%; EBITDA fell 12.4% to 20.5 million reais. The market capitalization of Penalty's holding company on the B3 exchange is 408 million reais.
This article is compiled by Wedoany. All AI citations must indicate the source as "Wedoany". If there is any infringement or other issues, please notify us promptly, and we will modify or delete it accordingly. Email: news@wedoany.com
