World Footwear

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Ferragamo: slowdown in the third quarter

Nov 13, 2019 Italy
Ferragamo: slowdown in the third quarter
The Italian luxury house registered net profit of 65 million euros in the first nine months of the year, stable year-on-year, but saw its sales fall in the third quarter
As of the 30th of September 2019, the Salvatore Ferragamo Group reported total revenue for the year of 994 million euros, up by 2.3% at current exchange rates and up by 1.9% at constant exchange rates, which compares to 972 million euros recorded in the first nine months of 2018. During the third quarter of 2019 total revenue recorded a decrease of 2.9% (-3.6% at constant exchange rates).

Distribution channel

By the end of September 2019 the group's retail network counted on a total of 656 points  of sales, including 394 Directly  Operated  Stores  (DOS)  and 262 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, further to the e-commerce channel.

In the first nine months of the year the retail distribution channel posted consolidated revenue up by 2.6% (+2.0% at constant exchange rates) with a stable third quarter compared to similar period in 2018 (+0.4% at current exchange rates and -0.5% at constant exchange rates). Revenue at constant exchange rates and perimeter (like-for-like) registered an increase of 1.4% in the accumulated for the year (9 months), despite the negative performance of the secondary channel. The wholesale channel registered an increase in revenue of 3.0% (+3.1% at constant  exchange rates), with a negative trend in the third quarter (-8.4% at current exchange rates and -8.7% at constant exchange rates), due to a different timing in the deliveries of fragrances compared to similar period of last year and to a slowdown of the Travel Retail channel mainly linked to the difficult geopolitical situation occurring in Hong Kong.


Geographical area

The Asia Pacific area is confirmed as the group's top market in terms of revenue, increasing by 2.7% both at current and constant exchange rates compared to the firts nine months of 2018. The solid performance of the retail channel in China in the first nine months of 2019 resulted in a 16.3% increase (+15.0% at constant exchange rates). The third quarter of fiscal 2019 performance in the area was significantly negatively impacted by the difficult geopolitical situation occurring in Hong Kong, where retail sales were down by 45% (comparing to the third quarter in 2018). EMEA posted an increase in revenue of 3.9% in the first nine months (+3.7% at constant exchange rates), with a positive performance in both distribution channels also in the third quarter. North America recorded a revenue decrease of 1.3% (-1.8% at constant exchange rates) compared to the first nine month of 2018, penalized by lower revenue from rentals and a negative performance of the wholesale channel in the third quarter. The Japanese market registered an increase in revenue of 0.9% (-0.2%, at constant rates). Revenue in the Central and South America registered an increase of 9.7% (+8.4% at constant rates) compared to the first nine months of 2018.

Revenue by product category

Among the product categories, at constant exchange rates, footwear posted an increase of 3.4% and handbags and leather accessories of 4.4% compared to the first nine months of 2018. Fragrances registered a 11.0% decrease at constant exchange rates, with third quarter 2019 performance (-35.2% at constant exchange rates) also penalized by a different timing in the deliveries compared to similar period last year.

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