Dive Brief:
- Salvatore Ferragamo SpA reported third quarter revenue of 221 million euros, or about $240 million, representing a 9.6% year-over-year decline, according to an earnings report Tuesday.
- The company’s year-to-date revenue was down 11.9% year over year to 744 million euros.
- Ferragamo CEO and General Manager Marco Gobbetti attributed the decline to a “challenging macroeconomic and consumer environment,” and said he expects the trend to continue into the last part of the year.
Dive Insight:
Ferragamo didn’t provide specific figures for its full-year outlook, but stated that its operating results for the full year were expected to “be at the lowest end of analysts’ current estimates.”
“The current context adds pressure on our top-line and profitability, therefore delaying the timing of the delivery of our financial objectives,” Gobbetti said in the release.
So far this year, Ferragamo has seen its revenue decline each quarter. During the first half of the year, Ferragamo saw its net profit fall 73.2%, according to its H1 results reported in August. Ferragamo’s Q3 earnings didn’t include net profit information.
In the third quarter, the company’s wholesale segment saw net sales fall 14.1% year over year, which it attributed to weaker demand, particularly in the U.S.
Its DTC net sales for the period fell 7.5% year over year, despite reporting positive performance in Europe, Japan and Latin America, per the company. The results were offset by weakness in the segment in the Asia Pacific region.
Net sales in Asia Pacific fell nearly 21% year over year. Gobbetti said the Asia Pacific region represented the biggest impact on the company’s overall sales performance. He attributed the decrease to low consumer confidence.
However, sales in Japan grew 3.4%, which Ferragamo attributed to double-digit growth in DTC in the region.
Net sales in the combined region of Central and South America fell 8.2%, net sales in North America fell 7.4%, and EMEA net sales were flat at 0.6%.
Ferragamo’s financial declines mirror a larger trend in luxury fashion. Recently, brands such as Kering, Burberry and Lanvin reported revenue decreases. However, some brands have fared better than others, including Prada and Hermès, which reported increased revenue.
Last month, a report from HSBC Global Research predicted that these luxury struggles would persist.
