Italian luxury label Ferragamo has reported a decline in revenue for the third quarter this year, which CEO and GEM Marco Gobbetti attributed to several macroeconomic challenges, particularly in the Asia Pacific.
“Decreasing consumer confidence is most notable in the Asia Pacific, which is the main phenomenon impacting our sales performance,” said Gobbetti.
The company’s total revenues for the quarter amounted to US$239 million (€221 million), a decrease of 7.2 per cent at constant exchange rates and 9.6 per cent at current exchange rates compared to last year.
For the first nine months of this year, group revenues stood at $805 million (€744 million), down 9.8 per cent at constant exchange rates and 11.9 per cent at current rates versus last year.
Despite these challenges, Gobbetti emphasized the company’s continued efforts to enhance its product offerings and focus on marketing and retail initiatives.
“We pursue our work on the enrichment of the offer, increasing engagement with new audiences through key products and maintaining a strong operational discipline,” he said.
Regional performance
The Europe, Middle East, and Africa region posted a slight increase in Q3 net sales, up 1.2 per cent at constant exchange rates, driven by a solid performance in the primary channel. However, for the first nine months of the year, EMEA sales fell by 11.5 per cent.
Sales in North America decreased by 7.9 per cent at constant exchange rates in Q3, affected by weak demand in the secondary and wholesale channels. For the first nine months, sales were down 6.4 per cent.
This Asia-Pacific region saw the biggest drop, with Q3 sales down 20.5 per cent at constant exchange rates, driven by lower consumer confidence and weak demand. The region’s nine-month performance mirrored this trend, with a 16.7 per cent decline.
In contrast, the Japanese market saw growth, with Q3 sales up 6.7 per cent at constant exchange rates, benefiting from solid performance in the direct-to-consumer (DTC) channel, supported by tourist flows.
Meanwhile, sales in Central and South America rose 9 per cent at constant exchange rates in Q3, buoyed by strong DTC performance. However, sales were down 3.3 per cent for the first nine months.
Wholesale and DTC channels
The direct-to-consumer (DTC) channel experienced a 5.7 per cent decline at constant exchange rates, with positive performances in Europe, Japan, and Latin America only partially offsetting the continued weakness in Asia-Pacific. Meanwhile, the wholesale channel saw a sharper drop, with sales falling 12.8 per cent.
Looking ahead, Ferragamo expects continued challenges in demand from luxury consumers. The company has warned that its operating result for the entire year will likely be lower than analysts’ expectations.
“We remain committed to maximizing the brand’s potential and continuing our efforts to deliver a distinctive in-store and online experience,” Gobbetti added.
