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Ferragamo: sales down by 18.9% in the third quarter

Nov 11, 2020 Italy
Ferragamo: sales down by 18.9% in the third quarter
The Italy-based luxury group announced third quarter results with sales down by 18.9%. The accumulated decline in 2020 reached 38.5%. The Asia Pacific area is confirmed as the group's top market, reaching over 42% of total revenue
As of the 30th of September 2020, the Salvatore Ferragamo Group reported total revenue of 611 million euros, declining by 38.5% at current exchange rates (-38.6% at constant exchange rates) from the 994 million euros recorded in the first nine months of 2019. Revenue in the third quarter of the current year registered a 18.9% decrease at current exchange rates (-18.1% at constant exchange rates). According to the luxury group, the decrease in revenue has been determined by the rapid diffusion of the pandemic caused by COVID-19 and the consequent decisions taken by the National governments regarding lock-downs of the commercial activities and given the restrictions in international traffic. The consequent closure of the majority of Ferragamo' store network in those countries and the significant reduction in traffic in the remaining stores, negatively impacted the results of the first six months of the year, that registered a progressive improvement in the last three months.

Revenue by Distribution Channel

By the end of the third quarter, the group's retail network counted on a total of 646 points of sales, including 393 Directly Operated Stores (DOS) and 253 Third Party Operated Stores (TPOS) 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 nine months of 2020 the retail distribution channel posted consolidated revenue down by 35.3%, with a decrease of 35.2% at constant exchange rates and perimeter (like-for-like) compared to similar period in 2019. In the third quarter of the current year, retail revenue decreased by 23.0%, with a -22.8% like-for-like performance and with the e-commerce channel registering a strong acceleration. The wholesale channel registered a decrease in revenue of 44.5%, mainly driven by the performance of the Travel Retail channel and of Fragrances. In quarter three, wholesale revenue was down by 8.7%.

Revenue by Geographical Area

The Asia Pacific area is confirmed as the group's top market, reaching, in the first nine months of the year, over 42% of total revenue, decreasing by 30.6%. The third quarter performance in the area, solidly recovering vs. the previous quarter, benefitted from the positive performance of the retail channel in China, which recorded a revenue growth of 38.3% at constant exchange rates, and that furtherly accelerated in October. A solid growth trend has been reported, in quarter three, also in the retail channel in South Korea and in Taiwan, that continue to register a robust revenue increase also in October.

The Japanese market registered a 30.9% decrease in revenue in the first nine months of the current year, with a performance in the third quarter of a decline of 17.3% also due to a hard comparison base in the month of September 2019. The month of October registered an increase in retail sales vs. the same period of last year. Overall, the Asian continent represents currently over 52% of total group’s revenue.

EMEA posted a decrease in revenues of 45.0% in the first nine months of the year, with the third quarter still strongly penalized by the limited tourists’ flows in the period.

North America recorded a revenue decrease of 45.1% in 9M 2020, with 3Q 2020 down 24.0%, solidly recovering from the previous quarter. Revenue in the Central and South America was down by 47.5% in the first nine months of the current year and by 31.9% in the third quarter.

Revenue by Product Category

All product categories reported a decrease in the first nine months of 2020 compared to the same period of last year.

Net Profit for the Period

The Net Profit for the period was negative for 96 million euros, which compares to 61 million euros positive in similar period in 2019.

Image credits: Arno Senoner on Unsplash

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