Ferragamo profit falls 25 percent for nine month period

As of 30 September 2017, the Salvatore Ferragamo Group posted total revenue of 1,005 million euros (1,884 million dollars), a 0.9 percent decrease against 9M 2016. The company said revenue growth at constant exchange rates was 0.2 percent. In the third quarter, total revenue amounted to 287 million euros (338 million dollars), down 5.5 percent, due to the negative impact of currencies, while sales rose 0.5 percent at constant exchange rates.

In the nine month period, the gross profit decreased by 5.1 percent to 645 million euros (759 million dollars). The gross operating profit (EBITDA) decreased by 25.1 percent over the period, to 162 million euros (190 million dollars). Excluding the 3 million euros negative impact for the planned disposal of the subsidiary in India, the company said, EBITDA would total to 165 million euros (194 million dollars), down 23.7 percent against. 9M 2016.

Retail channel witnesses growth, wholesale declines

As of September 30, 2017, the group's retail network counted on a total of 687 points of sales, including 407 directly operated stores (DOS) and 280 third party operated stores (TPOS) in the wholesale and travel retail channel, as well as the presence in department stores and multi-brand specialty stores. In the nine months, the retail distribution channel posted consolidated revenues up by 1.2 percent or 2.9 percent at constant exchange rates in like-for-like sales.

The company said that the wholesale channel, penalized by the destocking activity, the political tensions in South Korea and the strategic rationalization in Japan, registered a decrease in revenues of 4.7 percent both at current and constant exchange rates.

Ferragamo sales rise 2.8 percent in its top market – Asia

The Asia Pacific area, the group's top market in terms of revenues, saw a sales increase of 2.8 percent or 3.5 percent at constant exchange rates, despite the soft trend in South Korea, mostly due to the significant decrease of Chinese tourists, and the ongoing negative performance in Hong Kong. On the contrary, the retail channel in China recorded a revenue growth of 8.1 percent or 15.5 percent at constant exchange rates in the first nine months of 2017.

Europe posted a decrease in revenues of 1.6 percent or 0.9 percent at constant exchange rates, with a positive performance for the retail channel and a negative trend for the wholesale business, negatively impacted by the destocking activity. North America recorded a revenue decrease of 4.3 percent or 3.3 percent at constant exchange rates, negatively impacted by the department stores sales.

The Japanese market registered a 6.7 percent or 4 percent decrease at constant exchange rates due to the strategic rationalization of the wholesale channel, while the retail stores recorded a stable performance. Revenues in the Central and South America continued to grow, registering a 3.1 percent or 6.9 percent rise at constant exchange rates, decelerating in 3Q due to the earthquake in Mexico in September.

Among the product categories, footwear posted a 1.2 percent decrease, handbags and leather accessories 0.6 percent, while fragrances saw a 3.2 percent increase.

The profit before taxes amounted to 106 million euros (124 million dollars), a decline of 32.6 percent, while the net profit for the period was 79 million euros (93 million dollars), marking a 28.3 percent decrease. The group net profit was down 26.8 percent to 82 million euros (96 million dollars).

Picture:Ferragamo website