Ferragamo grows revenue and returns to black as relaunch strategy advances
Ferragamo’s Financial Performance and Strategic Developments
First Half Net Profit and Sales Growth
MILAN, Aug 3 (Reuters) - Italian luxury brand Ferragamo swung to a net profit for the first half, after growing sales by 4.6% at constant currencies in the second quarter, with turnaround efforts particularly evident in the performance of directly owned shops.
Improved Store Performance
Ferragamo, which has been operating without a permanent chief executive for more than a year, said a bigger share of the people walking around its shops had made a purchase, with an increase both in full-price sales and in the average price and number of items sold.
Direct Sales and Revenue Growth
Direct sales to customers rose 6.6% at constant currencies in the April-June period, it said.
Management and Strategic Decisions
Board member Ernesto Greco told a post-earnings analysts call that the sales growth pace had moderated in July.
Sales Moderation and Discount Strategy
This reflected a slowdown in the United States but also a decision to cut short the period of summer discount sales, he said.
Leadership and Advisory Committee
A former Ferragamo general manager, Greco sits on the advisory committee that has been supporting Chairman Leonardo Ferragamo in leading the group since former CEO Marco Gobbetti left last year after just three months in the job.
Inventory Management Considerations
Greco said Ferragamo was considering repurchasing some unsold inventory sitting with stores, to protect the value of its brand.
Recent Challenges and Revenue Details
The company has been battling a prolonged slide in sales in recent years, fuelling speculation the founding family could cut its holding, a possibility they have denied.
Quarterly Revenue and Profit Figures
Group revenue totalled €259 million ($298 million) in the second quarter, up 2.4% year-on-year when taking into account foreign exchange rates.
The Florentine group posted a net profit of €1.5 million for the first half, compared with an adjusted loss of €16 million in the same period a year ago.
Core Profit and Cost Control
Its core profit improved almost by a quarter to €90 million from a year earlier thanks to strict cost control.
Exchange Rate Information
($1 = 0.8689 euros)
(Reporting by Valentina ZaEditing by Keith Weir and Gavin Jones)