Salvatore Ferragamo posts sharp decline in turnover and profit
By Prachi Singh
16 Sep 2020
As of June 30, 2020, the Salvatore Ferragamo Group reported revenues of 377 million euros down 46.6 percent at current exchange and 46.9 percent at constant exchange rate. Revenues in the second quarter registered a 60.1 percent decrease at current exchange and 59.4 percent at constant exchange rates. The company said in a statement that the drop in revenues has been determined by the rapid diffusion of the pandemic caused by Covid-19.
In the first half, the company’s gross profit decreased by 50.5 percent to 226 million euros. Its incidence on revenues was down 480 basis points, moving to 60.0 percent, from 64.8 percent of 1H 2019. The gross operating profit (EBITDA) decreased by 83.9 percent over the period to 30 million euros, while operating profit (EBIT) was negative at 74 million euros vs. 94 million euros positive in 1H 2019. The company said that pre-tax profit was negative for 93 million euros vs. 79 million euros positive last year, net profit was negative 86 million euros vs. 60 million euros positive in 1H 2019, while the group net profit was negative 82 million euros against 58 million euros positive in 1H 2019.
Salvatore Ferragamo’s retail and wholesale channels posts sharp sales decline
At the first half period, the group’s retail network counted on 643 points of sales, including 389 directly operated stores and 254 third party operated stores in the wholesale and travel retail channel, as well as the presence in department stores and high-level multi-brand specialty stores. In the first half, the retail distribution channel posted consolidated revenues down 41 percent or 41.1 percent at constant exchange rates, with a decrease of 41 percent at constant exchange rates and like-for-like. In the second quarter, retail revenues decreased 51.2 percent or 50.7 percent at constant exchange, with a 51 percent like-for-like performance.
The wholesale channel registered a decrease in revenues of 56.4 percent or 56.8 percent at constant exchange rates penalized by the performance of the travel retail channel and of fragrances. In the second quarter, wholesale revenues were down 75.7 percent or 74.4 percent at constant exchange rates.
Salvatore Ferragamo’s performance across geographies
The company added that Asia Pacific area confirmed as the group’s top market, reaching over 44 percent of total revenues, decreased by 39.9 percent or 39.1 percent at constant exchange rates. The second quarter performance in the area showing 35.3 percent drop at constant exchange, recovered vs. the previous quarter, benefitted from the positive performance of the retail channel in China, which recorded a revenue growth of 11.6 percent at constant exchange rates. The company further said that a similar growth trend has been registered, in the second quarter, in the retail channel in South Korea, that reported a positive performance in 1H 2020.
Ferragamo said, the Japanese market registered a 37.4 percent decrease in revenues or 39.3 percent at constant exchange in the first half, with second quarter sales down 56.1 percent or 58.4 percent at constant exchange rates penalized by the stores closures in the period. EMEA posted, in 1H 2020, a decrease in revenues of 51.7 percent or 51.2 percent at constant exchange, with second quarter sales down 71.9 percent at constant exchange strongly impacted by the stores closures and the lack of tourists’ flows in the period.
North America recorded a revenue decrease of 54.4 percent or 57.8 percent at constant exchange in the first half, with second quarter revenues down 81.1 percent or 83.2 percent at constant exchange rates, while revenues in the Central and South America in 1H 2020 were down 54.6 percent or 50.1 percent at constant exchange, with second quarter down 89.2 percent or 83.1 percent at constant exchange.
All product categories, at constant exchange rates, reported a decrease in 1H 2020 vs. the same period of last year with the fragrances division registering a decrease in Revenues of 66.6 percent.