Ferragamo posts 41 percent drop in H1 operating profit

In the second quarter, Salvatore Ferragamo’s revenues amounted to 296 million euros, down 6 percent at constant exchange and down 8.1 percent at current exchange rates, penalised by a weak Asian market and wholesale environment.

In the first half period, revenues amounted to 523 million euros, down 10.9 percent at constant exchange and down 12.8 percent at current exchange rates.

The first half EBITDA decreased to 117 million euros, operating profit amounted to 28 million euros, down 41 percent, profit before taxes declined to 15 million euros, net profit decreased to 6 million euros and group net profit was 6 million euros.

Commenting on the trading update, Marco Gobbetti, the group CEO and general manager said in a statement: “Despite positive operating trends, our aggregate financial results in the second quarter were significantly impacted by the challenging consumer environment, especially in Asia Pacific, which offset the positive trends in the rest of the world. We have also continued to experience weakness in the wholesale channel, exacerbated by a more selective distribution strategy.”

Ferragamo’s performance across retail channels

In the second quarter, the company’s DTC channel posted a decrease of 3.8 percent at constant exchange and 5.5 percent at current exchange, with positive performances in Europe and Japan and in line in North America, offset by the weak Asia Pacific area.

In the first six months, the DTC channel was down 5.5 percent at constant exchange and down 8.1 percent at current exchange rates.

The wholesale channel registered a decrease of 12.1 percent at constant exchange rates and 8.7 percent at current exchange in the second quarter, reflecting the weak overall environment.

In the first half, the wholesale channel was down 24.8 percent at constant exchange and down 23.1 percent at current exchange rates

Ferragamo posts revenue decline across core geographies

In the second quarter, EMEA posted a decrease of 2.9 percent at constant exchange and 2.7 percent at current exchange rates, due to the wholesale business. DTC performance was 5.4 percent above last year, while wholesale was negative 11.3 percent at constant exchange. In the first six month period, EMEA decreased 16.3 percent at constant exchange and 16.1 percent at current exchange rates, with DTC up 4.6 percent and wholesale down 32.8 percent.

North America recorded a decrease of 3.2 percent at constant exchange and 1.4 percent at current exchange, impacted by a negative wholesale performance. In the first half, North America decreased 5.7 percent at constant exchange and 5.5 percent.

Central and South America were down 6.1 percent at constant exchange and 5.4 percent at current exchange, with DTC up 2.4 percent and wholesale negative. In the first half, Central and South America decreased 8.4 percent at constant exchange and 6.9 percent at current exchange rates.

Asia Pacific registered a decrease of 14.9 percent both at current and constant exchange rates in the second quarter, while in the first half, Asia Pacific decreased 15.1 percent at constant exchange and 17 percent at current exchange rates. The Japanese market registered an increase of 9.8 percent at constant exchange but down 1.7 percent at current exchange. In the first six months, Japan increased by 2.6 percent at constant exchange but declined 9 percent at current exchange rate.