On October 15, the Italian luxury group Salvatore Ferragamo Group (EXM: SFER) released its financial results for the third quarter and the first nine months of fiscal year 2024, ending on September 30, 2024. In the third quarter, the group’s revenue reached €221 million, a year-on-year decrease of 7.2% at constant exchange rates and 9.6% at current exchange rates. The decline was primarily driven by weak performance in the Asia-Pacific market, a secondary channel under DTC (Direct-to-Consumer), and challenges in the wholesale environment. For the first nine months, the group’s revenue was €744 million, a year-on-year decline of 9.8% at constant exchange rates and 11.9% at current exchange rates.
In the third quarter, the group’s net sales in the Asia-Pacific market dropped by 20.5% at constant exchange rates and 20.9% at current exchange rates. For the first nine months, net sales in the Asia-Pacific region fell by 16.7% at constant exchange rates and 18.1% at current exchange rates.
At the same meeting, the group’s board of directors also announced:
- The appointment of Mr. Ernesto Greco as a new board member;
- A decision to convene an Ordinary and Extraordinary Shareholders’ Meeting on November 26, 2024.
As of the close of trading on October 15, the share price of Salvatore Ferragamo Group had risen by 0.62% to €6.47 per share, with a market value of €1.073 billion. Over the past 12 months, the group’s share price has dropped by 45.72%.
Regarding the results during the reporting period, Salvatore Ferragamo Group’s CEO and General Manager Marco Gobbetti commented: “The results of the third Quarter have been impacted by the challenging macroeconomic and consumer environment and we expect this trend to continue in the last part of the year. Decreasing consumer confidence is most notable in Asia Pacific, being the main phenomenon impacting our sales performance. The secondary channel has also been affected by low traffic, which also continues to impact the wholesale environment.”
He further stated, “The current context adds pressure on our top-line and profitability, therefore delaying the timing of the delivery of our financial objectives. We pursue our work on the enrichment of the offer, together with marketing and retail actions to maximize the potential of the brand, through increasing engagement of new audiences with key products, and continuing the distinctive narrative and elevated in-store and on-line experience, while maintaining a strong operational discipline. These efforts have yielded encouraging results in the quarter through our primary sales in Europe, Japan, and Latin America, in all major product categories of our renewed continuative offer, in particular handbags and ladies’ shoes, led by new icons.”
By distribution channel:
- In the third quarter of 2024, the combined net sales of the DTC (Direct-to-Consumer) channel decreased by 5.7% at constant exchange rates and 7.5% at current exchange rates. Positive performances in Europe, Japan, and Latin America only partially offset the continued weakness in the Asia-Pacific region. The overall performance of the DTC channel was mainly negatively affected by lower traffic in the secondary channel. For the first nine months, DTC channel sales fell by 5.6% at constant exchange rates and by 7.9% at current exchange rates.
- In the third quarter of 2024, the net sales in the wholesale channel declined by 12.8% at constant exchange rates and by 14.1% at current exchange rates, reflecting market conditions where demand was lower than expected, particularly in the U.S. market. For the first nine months, wholesale channel sales decreased by 22.1% at constant exchange rates and by 21.0% at current exchange rates.
By geographic region:
- In the third quarter of 2024, net sales in the EMEA (Europe, Middle East, and Africa) region grew by 1.2% at constant exchange rates and 0.6% at current exchange rates, mainly driven by strong performance in the primary DTC channel, although the secondary DTC channel and wholesale business declined by mid-single digits. For the first nine months, net sales in the EMEA region fell by 11.5% at both constant and current exchange rates, with wholesale business declining by 28.0%, partly due to the negative performance in the first quarter and a high comparison base from the same period last year; DTC channel sales, however, grew by 4.5% at constant exchange rates.
- In the third quarter of 2024, net sales in North America fell by 7.9% at constant exchange rates and 7.4% at current exchange rates, impacted by weak performance in the secondary DTC and wholesale channels; performance in the primary DTC channel remained flat at constant exchange rates compared to the previous year. For the first nine months, net sales in North America declined by 6.4% at constant exchange rates and 6.1% at current exchange rates.
- In the third quarter of 2024, net sales in Latin America grew by 9.0% at constant exchange rates but fell by 8.2% at current exchange rates, compared to the third quarter of 2023, with the primary DTC channel achieving double-digit growth, while both the secondary DTC channel and wholesale channel underperformed. For the first nine months, net sales in Latin America fell by 3.3% at constant exchange rates and by 7.3% at current exchange rates.
- In the third quarter of 2024, net sales in the Asia-Pacific region declined by 20.5% at constant exchange rates and by 20.9% at current exchange rates. For the first nine months, net sales in the Asia-Pacific region fell by 16.7% at constant exchange rates and by 18.1% at current exchange rates.
- In the third quarter of 2024, net sales in Japan increased by 6.7% at constant exchange rates and by 3.4% at current exchange rates, benefiting from double-digit growth in the primary DTC channel, partly driven by an increase in tourist traffic. For the first nine months, net sales in Japan grew by 3.9% at constant exchange rates but declined by 5.4% at current exchange rates.
Looking ahead, the report stated that given the ongoing uncertainty in demand among luxury consumers, Salvatore Ferragamo Group expects its full-year operating results to be at the lower end of analysts’ current estimates.
｜Source: Salvatore Ferragamo Group official website and financial reports
｜Image Credit: Salvatore Ferragamo Group official website
｜Editor: LeZhi
