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Ferragamo's revenue and profit dropped in the first half

Aug 11, 2023 Italy
Ferragamo's revenue and profit dropped in the first half
The luxury group reported a 4.8% fall in revenue in the first half of 2023, as compared to the same period of 2022. In addition, net profit for the period plunged by 65.4% year-on-year
“In this first part of the year, we made good progress in the execution of our strategic priorities, in line with our plans. We kept the focus on the operating improvements and brand initiatives to support a new offering that is relevant for our customer aspirations, while continuing the optimization of our retail and wholesale networks”, commented Marco Gobbetti, Chief Executive Officer and General Manager. “We are pleased by the early results of the products designed by our creative director, Maximilian Davis. These new products still represent a very small portion of the total offer and are yet to contribute meaningfully to the overall sales performance, which reflects, at this stage, the acceleration of the transition from the previous creative course, as well as our ongoing focus on the quality of sales and distribution”, he added.

First Half Results

At the end of June, Ferragamo's total revenue amounted to 600 million euros, down by 4.8% at current exchange rates and 7.2% at constant exchange rates, on a comparable basis to the same period of last year.

The retail distribution channel contributed 414.1 million euros to the total revenue in the first semester of 2023, reflecting a decrease of 5.9% (or 4.5% at constant exchange rates), while the wholesale channel's revenue declined by 13.3% (or 14.3% at constant exchange rates), totalling 166.8 million euros, as compared to the first half of 2022.

In the first half of the current fiscal year, Ferragamo's net sales in the Asia Pacific region were down by 12.9% (or 10.4% at constant exchange rates), amounting to 190.0 million euros, due to a weaker performance in Korea, by contrast with a positive one in Greater China, while the Japanese market registered a decrease in net sales of 11.4% (or 3.8% at constant exchange rates) to 45.4 million euros, on a comparable basis to a similar period of the prior year.

Additionally, in North America, the group's net sales reached 155.6 million euros, declining by 17.3% (or 18.6% at constant exchange rates) from the first half of 2022, as the wholesale channel underperformed “more than proportionally as a consequence of the network rationalization”.

Meanwhile, the company's net sales were broadly flat at 40.3 million euros in the Central and South America region in the first half of 2023, as compared to the same period of last year, while the EMEA region registered an increase in net sales of 10.8% (or 10.9% at constant exchange rates) year-over-year to 150.7 million euros.

In the six months to the 30th of June, Ferragamo's net profit for the period amounted to 21.4 million years, decreasing by 65.4% from 61.9 million euros in profit registered in the same period a year ago.


Image Credits: anneofcarversville.com

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