Renowned Italian luxury brand, Salvatore Ferragamo experienced a 41 per cent decline in operating profit during H1, FY24. This decline reflects a challenging economic environment and weakened consumer demand across all major regions.
The company's EBIT reached €28 million ($30.2 million) in the first half of the year, which, although a significant drop, was better than expected. Analysts had anticipated a sharper decline to €20 million, as reported by Italian broker Equita. This beat suggests that while the company faced headwinds, it managed to maintain a level of profitability beyond market expectations.
The group's overall revenues fell by 6 per cent at constant exchange rates in the second quarter. This decline was driven by various factors, including the ongoing challenges in the global luxury market and specific regional issues.
The company faced considerable difficulties in the Asia Pacific region, which has traditionally been a strong market for luxury goods. The consumer environment in this area was particularly challenging, leading to a notable decline in sales. This region's performance significantly impacted the company's overall financial results.
While Asia Pacific struggled, there were positive trends in other parts of the world. However, these positive trends were not sufficient to counterbalance the declines experienced in the Asia Pacific.
Marco Gobbetti, CEO, says, despite challenges, the company remains focused on navigating the tough market conditions and leveraging its brand's strength and heritage to achieve long-term growth.
