Ferragamo sales decline amid weak consumer demand in Asia Pacific

In the third quarter, Salvatore Ferragamo’s revenues amounted to 221 million euros, down 7.2 percent at constant exchange and down 9.6 percent at current exchange rates penalised by a weak Asia Pacific market, secondary channel and wholesale environment.

In the nine month period, revenues amounted to 744 million euros, down 9.8 percent at constant exchange rates and down 11.9 percent at current exchange rates.

Considering persisting uncertainties over demand by luxury consumers, the company expects the operating result for the full year will be at the lowest end of analysts’ current estimates.

Commenting on the trading update, Marco Gobbetti, the company’s CEO and general manager said in a statement: “The results of the third quarter have been impacted by the challenging macroeconomic and consumer environment and we expect this trend to continue in the last part of the year. The current context adds pressure on our top-line and profitability, therefore delaying the timing of the delivery of our financial objectives.”

Ferragamo posts sales decline across distribution channels

In the third quarter, the company’s DTC channel posted a decrease of 5.7 percent at constant exchange and 7.5 percent at current exchange with the positive performances in Europe, Japan and Latin America, only partly offsetting the persistent weakness in the Asia Pacific area. The company said that the overall performance of the DTC was negatively impacted mainly by the secondary channel, mostly due to low traffic.

In the nine month period, the DTC was down 5.6 percent at constant exchange and down 7.9 percent at current exchange rates.

Wholesale channel registered a decrease of 12.8 percent at constant exchange and 14.1 percent at current exchange in the third quarter, reflecting weaker than expected demand, especially in the US market. The channel was down 22.1 percent at constant exchange and down 21 percent at current exchange in the nine months of 2024.

Ferragamo Q3 sales decline across markets except EMEA

By geography, EMEA posted an increase of 1.2 percent at constant exchange rates and 0.6 percent at current exchange rates, driven by the performance of the primary channel, while secondary and wholesale business were down mid-single digit. In the nine month period, EMEA decreased 11.5 percent both at current and constant exchange rates, due to 28 percent decline in wholesale, while DTC was up 4.5 percent.

North America recorded a decrease of 7.9 percent at constant exchange and 7.4 percent at current exchange rates, impacted by a negative secondary channel and wholesale performance, while the performance of the DTC channel remained in line with last year. In the nine months of 2024, North America decreased 6.4 percent at constant exchange and 6.1 percent at current exchange.

Net Sales in Central and South America were up 9 percent at constant exchange and down 8.2 percent at current exchange, with primary DTC up double-digit, while secondary and wholesale were negative. Central and South America decreased 3.3 percent at constant exchange and 7.3 percent at current exchange in the nine month period.

Asia Pacific registered a decrease of 20.5 percent at constant exchange and 20.9 percent at current exchange rates in the quarter, while sales for the nine months decreased 16.7 percent at constant exchange and 18.1 percent at current exchange rates. The Japanese market registered an increase of 6.7 percent at constant exchange and 3.4 percent at current exchange, while in the nine month period, Japan increased by 3.9 percent at constant exchange and declined 5.4 percent at current exchange rates.