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Salvatore Ferragamo H1 revenue increases 10 percent

By Prachi Singh

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As of June 30, 2015, the Salvatore Ferragamo Group posted total revenue of 722 million euros (814.8 million dollars), registering a 10 percent increase at current exchange rates including the negative hedging effect of 23 million euros (25.9 million dollars). Revenue growth at constant exchange rates was 2 percent.

In the second quarter, the total revenue trend was similar to the one reported in the first quarter. Revenue reached 395 million euros (445.6 million dollars) from 360 million euros (406.3 million dollars) in the same quarter of 2014, reporting a 10 percent increase on current exchange rates including the negative hedging effect of 15 million euros (16.9 million dollars) and 2 percent at constant exchange rates.

Growth across all regions

The Asia Pacific area is confirmed as the Group's top market in terms of revenues, increasing by 7 percent or below 4 percent at constant exchange rates. In particular the retail channel in China recorded a revenue growth of 17 percent or 3 percent at constant exchange rates in the first six months of 2015, while trends in Hong Kong and Macau further deteriorated in the second quarter. Europe posted an increase in revenues of 8 percent or over 6 percent at constant exchange rates, with an acceleration in the second quarter of 13 percent.

The retail channel confirmed its double-digit growth further accelerating in the second quarter, while the wholesale business, negatively impacted by the geopolitical tensions in Eastern Europe and Greece, saw a stable turnover, increasing in the second quarter. North America recorded a revenue increase of 16 percent or over 3 percent at constant exchange rates in the first six months of 2015, accelerating in 2Q 2015. The Japanese market registered an 8 percent growth or 11 percent at constant exchange rates in 1H2015 and a 12 percent growth or 18 percent at constant exchange rates in 2Q2015.

Revenues in the Central and South America in the first half continued the double-digit growth, posting an increase of 18 percent or over 12 percent at constant exchange rates. In the second quarter, revenues grew 10 percent or 7 percent at constant exchange rates.

Retail distribution on the growth track

As of June 30, 2015, the Group's retail network had 380 directly operated stores (DOS), while the wholesale and travel retail channel included 267 third party operated stores (TPOS), as well as the presence in department stores and high-level multi-brand specialty stores.

In the first half, the retail distribution channel posted consolidated revenue rise of over 11 percent or 3 percent at constant exchange rates, with a roughly stable growth at constant exchange rates and perimeter. The wholesale channel, despite the hard comparison base increased over 12 percent at constant exchange rates and the ongoing geopolitical tensions in Eastern Europe and in Greece, registered an increase in revenues of 6 percent and stable at constant exchange rates.

Among the product categories it is especially worth highlighting the increase of handbags and leather accessories, that posted a growth of 16 percent in 1H2015, while the performance of fragrances was penalized by the unstable situation in Eastern Europe and by a different delivery calendar against the same period of last year.

Gross profit increased by 15 percent. Its incidence on revenues increased 300 basis points, moving to 65.8 percent, from 62.8 percent, last year. The EBITDA increased by 15 percent over the period, with an incidence on revenues significantly increasing to 22.8 percent, from 21.7 percent in the first half of last year. In the second quarter, EBITDA reached 104 million euros (117.2 million dollars), further increasing the incidence on revenues to 26.2 percent, from 25.1 percent in 2Q2014.

Salvatore Ferragamo