World Footwear

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Ferragamo loses 25% of profits

Nov 24, 2017 Italy
Ferragamo loses 25% of profits
The Italy-based luxury brand has posted a decrease in revenue for the quarter and for the accumulated in the year. Decline in profit for the first nine months of the year reaches the 25% threshold
In the third quarter of 2017, Ferragamo’s total revenue amounted to 287 million euros, down by 5.5% (including the hedging effect), and reflecting the negative impact of currencies fluctuation (+0.5% at constant exchange rates).

For the first nine months of the year accumulated revenue reached 1.005 billion euros, a 0.9% decrease (including the hedging effect) compared to period in 2016 (1.014 billion euros). Revenue growth for the period, at constant exchange rates, was 0.2%.

As of the 30th of September 2017, the group's retail network included a total of 687 points of sales, including 407 Directly Operated Stores (DOS) and 280 Third Party Operated Stores (TPOS) in the Wholesale and Travel Retail channel, besides the presence in Department Stores and high-level multi-brand Specialty Stores.

In the first nine months of the year, the retail distribution channel posted consolidated revenue up by 1.2% (+2.9% at constant exchange rates). The wholesale channel, penalized by the destocking activity, the political tensions in South Korea and the strategic rationalization in Japan, registered a decrease in revenue of 4.7% both at current and constant exchange rates, compared to similar period in 2016.

The Asia Pacific area is once again confirmed as the group's top market in terms of revenue, increasing by 2.8% (+3.5% at constant exchange rates 2), despite the soft trend in South Korea, mostly due to the significant decrease of Chinese tourists, and the ongoing negative performance in Hong Kong. On the contrary, the retail channel in China recorded a significant revenue growth of 8.1% (+15.5% at constant exchange rates) in the first nine months of 2017. Europe posted a decrease in revenue of 1.6% (-0.9% at constant exchange rates) compared to the first nine months in 2016, with a positive performance for the retail channel and a negative trend for the wholesale business, negatively impacted by the destocking activity. North America recorded a revenue decrease of 4.3% (-3.3% at constant exchange rates) in the first nine months of 2017, also negatively impacted by the department stores sales. The Japanese market registered a 6.7% decrease (-4.0% at constant exchange rates) in the first nine months of 2017, due to the strategic rationalization of the wholesale channel, while the retail stores recorded a stable performance. Revenue in Central and South America in the first nine months of 2017 continued to grow, registering a 3.1% increase (+6.9% at constant exchange rates), decelerating in quarter three, as driven by the earthquake in Mexico in September.


Product categories

Compared to the first nine months of 2016, revenue of the footwear segment decreased by 1.2%; the handbags and leather accessories segment posted a decline of 0.6%, while fragrances registered a 3.2% increase.


Net Profit

The net profit for the first nine months of the year totaled 82 million euros, marking a 26.8% decrease from similar period in 2016.

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