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Ferragamo has blamed the “challenging macroeconomic and consumer environment”, particularly in Asia, for a continued slump in sales. It warned that it expects similar conditions going into the fourth quarter.
The Italian company’s sales fell 7.2 per cent year-on-year on a constant currency basis to €221 million in the third quarter of 2024. In the first nine months of its financial year, sales have declined 9.8 per cent. The company expects its full-year results to be at the “lowest end of analyst estimates”.
“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,” said CEO Marco Gobbetti in a statement. “Decreasing consumer confidence is most notable in Asia-Pacific, being the main phenomenon impacting our sales performance. The secondary channel has also been affected by low traffic, which continues to impact the wholesale environment.”
Direct-to-consumer (DTC) sales declined 5.7 per cent in Q3, while wholesale sales dropped 12.8 per cent due to weaker-than-expected demand, particularly in the US.
EMEA sales inched up 1.2 per cent in Q3. Asia-Pacific sales dropped 20.5 per cent year-on-year, though the Japanese market saw sales grow 6.7 per cent. North America saw a sales decline of 7.9 per cent amid the wholesale underperformance, while Central and South America increased 9 per cent thanks to DTC demand.
The luxury goods market has been experiencing a slowdown since last year, with even the biggest players such as LVMH and Kering taking a hit. After an increase in sales in 2022 under Gobbetti’s turnaround plan (despite profits being down that year), Ferragamo’s sales have been dropping since the first quarter of 2023.
“The current context adds pressure on our top line and profitability, therefore delaying the timing of the delivery of our financial objectives,” Gobbetti said on Tuesday. “We pursue our work on the enrichment of the offer, together with marketing and retail actions to maximise the potential of the brand, through increasing engagement of new audiences with key products, and continuing the distinctive narrative and elevated in-store and online experience, while maintaining a strong operational discipline.”
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