Salvatore Ferragamo (SFER) Q3 2024 earnings summary

Executive summary

• 9M 2024 revenues totaled €743.9M, down 11.9% year-over-year (down 9.8% at constant FX), mainly due to weak Asia Pacific demand and lower wholesale activity.

• Q3 2024 revenues reached €221M, down 7.2% at constant and 9.6% at current exchange rates versus Q3 2023.

• Positive sales trends in Europe, Japan, and Latin America primary channels, with handbags and ladies' shoes performing well.

• Ongoing focus on product innovation, marketing, and retail actions to maximize brand potential and engage new audiences.

• CEO expects macroeconomic and consumer headwinds, especially in Asia Pacific, to persist through year-end.

Financial highlights

• Net sales declined 11.4% year-over-year (down 10.0% at constant FX) to €723.9M.

• DTC channel revenues fell 7.9% (down 5.6% at constant FX) in 9M; wholesale dropped 21.0% (down 22.1% at constant FX).

• Hedging income decreased 62.7% to €4.7M; licenses and other revenues stable at €12.8M.

• EMEA Q3 net sales rose 1.2% at constant FX, but 9M sales fell 11.5% due to weak wholesale.

• By product, 9M footwear sales fell 11.3%, leather goods down 10%, apparel down 20.5%, silk & other down 10.4% at constant FX.

Outlook and guidance

• Management expects the challenging macroeconomic and consumer environment to persist into year-end, continuing to pressure sales and profitability.

• Full-year operating result expected at the lowest end of analysts' current estimates.

• Timing of financial objectives delivery is delayed due to current market conditions.