Ferragamo: net income drops 15.4% in first half

Italian luxury group Salvatore Ferragamo announced on Monday a 15.4% drop in its first-half net income, of 76 million euros, a result somewhat lesser than expected. According to analytics firm Factset Estimates, analysts had predicted 83 million.

EBITDA fell 17.9% to 136 million euros, while observers had expected 140 million. Consolidated turnover rose 1.1% to 718 million, in line with anaylyst expectations.

Asia-Pacific remained the strongest market for the group, accounting for 37.8% of sales. The couturier saw turnover in the zone increase 6.1% over the first half. Sales also soared by 7.2% in Central and South America, but slipped 2.4% in Europe; 2.2% in North America and 3.4% in Japan.

Ferragamo indiated at the beginning of February that its mid-term objective would be an increase in revenue at double the market rate, while reinforcing its products (bags, accessories, clothes) other than shoes, consolidating its position in the sector. Footwear accounted for 43.6% of its revenue in the first half.

The Florentine label, which did not give detailed figures, predicted an upturn in profitability, as much as for its operating margin as its EBITDA, maintaining strict control over its costs.

The group recorded a positive cash flow of 25 million euros at the end of June, against net debt of 75 million euros one year earlier. Ferragamo last year launched a thorough reorganisation process, including making executive changes in its creative team and for the role of general manager.

The label has been helmed for almost a year by Eraldo Poletto, who was formerly general manager of the transalpine leather brand Furla, where he prioritised internationalisation. Ferragamo also named Fulvio Rigoni creative director of its women's ready-to-wear; Guillaume Meilland creative director for women's; and shoe specialist Paul Andrew as creative director for the women's footwear division.