MILAN — Weak consumer confidence in Asia-Pacific and negative trends in wholesale channels impacted Salvatore Ferragamo Group’s third-quarter revenue and depressed its overall performance for the first nine months of 2024. Ta.
Revenues for the third quarter were 221 million euros, down 9.6% year-on-year. Sales for the nine months to September 30 were 744 million euros, down 11.9% compared to the same period in 2023.
“Our third quarter results were impacted by a challenging macroeconomic and consumer environment, and we expect this trend to continue into the second half of the year,” said Marco Gobbetti, Chief Executive Officer and General Manager. , indicating strong performance in the Asia-Pacific region. The region “was the primary phenomenon impacting our sales performance. Secondary channels were also affected by low traffic, which continues to impact the wholesale environment.”
Over the nine-month period, sales in the direct-to-consumer channel decreased by 7.9% to €552.2 million.
There are a total of 369 stores worldwide, compared to 377 at the end of September last year. New stores have opened in Tokyo, Beijing, Seoul and Suzhou.
Sales in the wholesale channel fell 21% to 171.6 million euros, reflecting weaker-than-expected demand in the third quarter, particularly in the U.S. market, Gobbetti said.
The executive said on a call with analysts at the close of trading in Milan on Tuesday that he expected the wholesale channel to “calm down somewhat” in the fourth quarter, but “it will still be slightly negative.” Ta. The US is expected to have bottomed out. Travel retail was hit hard. ”He did not express optimism about the channel for the last quarter of the year.
Mr. Gobbetti did not rule out “some changes,” but said there were no plans for “significant streamlining of stores.”
Inside the renovated Ferragamo store on Via Montenapoleone in Milan.
Courtesy of Ferragamo
By category, footwear decreased by 11.3% to 336.1 million euros, and leather goods decreased by 10% to 293.1 million euros. Apparel sales decreased by 20.5% to 42.9 million euros.
Starting with Gobbetti’s comments about the positive response to the collection designed by creative director Maximilian Davies, one analyst highlighted a disconnect, asking why it’s not showing up in the numbers and how the direct-to-consumer channel is performing. I asked him the reason for his poor performance. In response, the executive said he was happy with the new aesthetic Davis has injected into the brand and products, but that “it takes time to grow and resonate with a wider audience, and (improvements) “It’s not something that can be done overnight.” ” The collection is “classic, very sophisticated and not flashy. We want to achieve expansion with a higher customer base,” he continued.
Over the past nine months, sales in the Europe, Middle East and Africa region decreased by 11.5% to €184.5 million. This was affected by a 28% decline in wholesale trade, while the DTC channel increased by 4.5% at constant exchange rates.
Sales in North America decreased by 6.1% to 207.7 million euros, and sales in Latin America decreased by 7.3% to 54.5 million euros.
Sales in Asia Pacific decreased by 18.1% to 216.1 million euros.
Revenues in Japan increased by 3.9% at constant exchange rates, but decreased by 5.4% at current exchange rates to €60.9 million.
Gobbetti said the Chinese cluster has tested negative overall and overseas purchases have fallen below pre-pandemic levels, moving to Japan. Americans’ spending accelerated in the second half of the month.
Ferragamo Spring 2025
Giovanni Giannoni/WWD
“The current situation is putting pressure on our sales and profitability, delaying the timeline for achieving our financial goals. By continuing to deliver on-demand in-store and online experiences, we maintain strong operational discipline as we seek to enrich our offer alongside our marketing and retail efforts to maximize the brand’s potential.” said Gobbetti.
“These efforts were encouraging in the quarter, with our new continuous offer across all major product categories, particularly in handbags and women’s footwear, led by the new Icon, through major sales in Europe, Japan and Latin America. It brought results.”
Mr. Gobbetti said he expected full-year operating profit to be around 30 million euros, at the lower end of analysts’ current expectations, given persistent uncertainty about luxury consumer demand. .
“We do not expect a significant change in operating profit trends in the fourth quarter,” Gobbetti said.
“The worst month was July, August was good, and September was in between,” he said, adding that he still expects the fourth-quarter top line to be slightly negative.
Capital expenditures in 2024 are expected to total EUR 75 million.
