The market environment was particularly challenging in the first half of 2024 and had negative effects on both sales and profitability of Salvatore Ferragamo Spa.
Last year, the Florentine company generated sales of around 1.04 billion euros, which corresponds to a decline of 10.5 percent (currency -adjusted -8.2 percent) compared to the EUR 1.16 billion in 2023.
But not only sales, Ferragamo 2024 also had to accept the profit. After taking a negative burden of 84 million euros into account by an impairing test, the operational result was shown with a loss of 49 million euros. The bottom line was that the company’s net loss was 68 million euros, which represents a significant decline compared to the net profit of 26 million euros in 2023.
The market environment is difficult, especially in China
2024 is a complex challenge, since the market is still influenced by geopolitical tensions and macroeconomic uncertainties, which has a negative impact on demand for luxury goods. “The slowdown of the Asian markets, especially in China, and an unfavorable global context for the wholesale business have further difficult,” said a message from the company.
“We have further expanded our product range, developed marketing strategies to strengthen the potential of the brand and consolidate customer loyalty through exclusive experiences in inpatient trade and online, while we also maintain consistent operational discipline,” continued the management.
In the fourth quarter of 2024, the group turnover was 291 million euros, which corresponds to a decrease of four percent in constant exchange rates and 6.7 percent in current exchange rates compared to the fourth quarter of 2023. The period surplus, including the shares of third parties, amounted to minus 68 million euros compared to plus 26 million euros in the 2023 financial year. As of December 31, 2024, the group recorded a positive adjusted netinance position of 173 million euros (compared to 224 million euros on December 31, 2023).
Results according to the geographical area
The sales in the EMEA region decreased by 7.8 percent in the 2024 financial year compared to the previous year (-8.9 percent to current exchange rates). In the North America region, the company recorded a decline in sales of 2.6 percent at both constants and current exchange rates.
In Central and South America, net sales increased by one percent at constant exchange rates compared to the previous year (-3 percent to current exchange rates). The Asia-Pacific region recorded a drop in sales of 18.9 percent to constant exchange rates (-19.7 percent on current exchange rates). In Japan, on the other hand, net turnover increased by 3.2 percent to constant exchange rates, while he declined by 4.3 percent to current exchange rates.
Forecasts for 2025
Due to the uncertainties regarding the demand for luxury goods, the company remains cautious about short -term expectations. “We will further strengthen our product range, use our inheritance and specifically go into the relevant customer segments,” said management. “We are confident that we can cope with the dynamics of the constantly changing market and that we can maintain sales development and profitability as a priority”.
This article previously appeared on fashionunited.it and was used with digital tools translated.
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