For the nine-month ended September 30, 2019, the Salvatore Ferragamo Group generated sales of €994 million, up 2.3% at current exchange rates and 1.9% at constant exchange rates, compared with €972 million in 2018.
By Luxus Plus
For the nine-month ended September 30, 2019, Ferragamo reported an increase in total sales. However, in the third quarter, Ferragamo recorded a decline of 2.9%. The group’s distribution network has 656 points of sale.
Retail recorded consolidated revenues up 2.6%
In the first nine months of 2019, the retail distribution channel recorded consolidated revenues up 2.6% with a third quarter 2019 almost stable compared to 2018.
Wholesale trade recorded a 3% increase in revenue at 30 September 2019, with a negative trend in the third quarter, due to a different schedule for perfume deliveries and the slowdown in travel retail, mainly due to a difficult geopolitical situation in Hong Kong.
Among the product categories, footwear increased by 3.4% and handbags and leather accessories by 4.4%. The fragrance segment, on the other hand, recorded an 11% decrease.
Asia Pacific remains the leading market
Asia Pacific is confirmed as the group’s leading market in terms of turnover, with growth of 2.7%. It should be noted that the distribution network in China performed well, with an increase of 16.3%. However, the third quarter performance was strongly impacted by the geopolitical situation in Hong Kong, where retail sales declined by 45% compared to the third quarter of 2018.
EMEA recorded a 3.9% increase with a positive performance in both distribution channels. North America recorded a decline of 1.3%, penalized by lower rental income and a negative performance from wholesale trade. The Japanese market recorded a 0.9% increase in revenue. Finally, Central and South America recorded an increase of 9.7% compared to 2018.
A slowdown that could continue at the end of the year
During the first half of 2019, gross margin increased by 4.2% to €644 million. Operating expenses increased by 6.2%, mainly due to marketing and communication expenses, organizational strengthening, rent increases and other operating expenses. Gross operating income decreased by 1.5% over the period. Net income amounted to €65 million, essentially stable compared to the same period in 2018.
In a persistently complex macroeconomic and market environment, the slowdown in revenue and operating margin announced by the Salvatore Ferragamo Group in the third quarter of 2019 could also continue in the latter part of the year.
