The first 9 months of 2019 put a spotlight on Ferragamo’s financial ups & downs. In summary, the third quarter closed with a decrease in sales. Which, mostly due to external reasons, interrupts the (finally) positive trend that took place during the first semester of the year. Positive, yet interrupted, but in the end confirming the positivity of 2019’s first 9 months.
Salvatore Ferragamo closed the first 9 months of 2019 with 994 million euro in sales. The increment on yearly base is of 2.3% at current rates and of 1.9% at constant rates, in comparison to the same period of 2018. The result is in line with analysts’ forecasts, according to a survey by Reuters. Net profits were of 65 million euro: -0.5% in comparison to the first 9 months of 2018.
During the third quarter of 2019 Ferragamo’s revenue fell by 2.9% (-3.6% at constant rates). The main factor behind the negative impact on the number is the Hong Kong situation. According to the Florentine company’s note, “retail sales in Hong Kong fell by 45% at constant rates, in comparison to the third quarter of 2018”. Ferragamo foresees that “the slowdown of sales and operating margins during the third quarter of 2019 could continue in the last quarter of the year”. That being said, the company’s strategy will not change. “We expect a 2019 in line or just above consensus”, stated the luxury brand’s CFO, Alessandro Corsi, during the conference call.
Hong Kong’s Weight
“The ex-British colony – explains Micaela Le Divelec, Ferragamo’s top manager -, has a weight of about 6% on all total sales of luxury goods and will decisively contract in the short period. But it should become stable at about one-half of the revenue generated before protests broke”. China’s market, on the other hand, will grow by about 20%.
Images from ferragamo.com