Ferragamo Q3 profits lower

Worldwide
Published:  12 November, 2018

Despite the Italian luxury label’s leather bags and accessories category recording a +3.4% increase in sales in the first nine months of the year, profit was hit by lower footwear sales.

For the nine-month period ending September 30, 2018, Salvatore Ferragamo reported total revenues of €972 million, down -3.3% at current exchange rates (-1.6% at constant) compared with €1,005 million recorded in the same period of 2017. In the third quarter, revenue totalled €298 million, up +3.9% at current exchange rates (+2.5% at constant). Between January and September, gross operating profit (EBITDA) was €149 million, down -7.9% compared with US$162million a year earlier. Net profit in the first nine months, including minority interests, stood at €65 million; down -17.5% decrease (9M 2017: €79 million).

Ferragamo’s sales in the Asia Pacific area in the first nine months of the year, the Group's main market in terms of revenues, decreased -1.9% (stable at constant exchange rates), with the retail channel in China up +1% in the period, after “a very strong” first nine months in 2017 (+15.5% at constant). Sales in Japan were down -0.4% (-1.7% at constant exchange), mainly attributed to the strategic rationalisation of the wholesale channel in the first half of the year, according to the Group. Sales declined -5.5% (-5.2% at constant) in Europe, -4% in North America and -3.6% in Central and South America, “penalised by the currency trend”.

At constant exchange rates, the footwear category posted a -4.3% decrease in the first nine months of 2018, while revenue in handbags and leather accessories were up +3.4% and fragrances +4.2%. The footwear category represents 41.7% of Ferragamo’s total revenue and leather goods 38.6%.