MILAN — Safilo Group recovered many of the gross sales decline within the former GrandVision chains within the first 9 months of the yr however traits in North America remained delicate at the same time as rising markets continued to develop.
Chief government officer Angelo Trocchia stated throughout a name with analysts on Friday night on the finish of buying and selling that Safilo had seen a return to development of its sports activities enterprise in North America, which confirmed a persistent weak point within the eyewear market, significantly within the modern section.
Within the 9 months ended Sept. 30, Safilo revenues have been down 5.6 p.c to 785.1 million euros, in contrast with 831.3 million euros in the identical interval final yr. Trocchia pointed to the stable efficiency of residence manufacturers, specifically Smith, Carrera and Polaroid, and among the many licensed manufacturers, Carolina Herrera, Boss, David Beckham and Tommy Hilfiger.
Through the interval, on-line channels represented 14.4 p.c of gross sales, marked by a continued very constructive efficiency of the direct-to-consumer gross sales of sports activities merchandise, contrasting with the nonetheless weak efficiency of web pure gamers.
Within the third quarter, group gross sales declined 9.8 p.c to 235 million euros.
“As anticipated, the decline of enterprise within the former GrandVision chains continued to weigh on Europe, internet of which gross sales within the space have been barely up in comparison with the identical quarter final yr, a interval that had been marked by the energy of the solar season,” stated Trocchia, whose contract was renewed for one more three years, it was reported on Friday.
Trocchia additionally expressed satisfaction within the settlement signed in September with Stuart Weitzman for a multiyear world licensing settlement for eyewear, which will likely be unveiled in 2024 for fall.
On the identical time, he additionally spoke with satisfaction of the settlement inked in September with Amazon to provide the brand new Carrera Sensible Glasses with Alexa.
“This is a vital first step into the longer term with an progressive method,” stated Trocchia. He shined a light-weight on the truth that “Amazon has chosen Safilo to launch this product, placing expertise and Italian design collectively. Will this variation gross sales? Revolutionize [business] in a single or two years? No, however it’s essential; in 5 to 6 years, eyewear will likely be completely different from as we speak and we’re getting on the practice of this enterprise mannequin, which is able to assist our picture and reinforce the model.”
Within the 9 months, Safilo’s adjusted gross revenue amounted to 459.1 million euros, primarily flat in comparison with the identical interval final yr.
Adjusted earnings earlier than curiosity, taxes, depreciation and amortization totaled 75.4 million, down 11.5 p.c from 85.3 million euros in the identical interval final yr.
Safilo’s financial efficiency was additionally impacted by non-recurring prices equal to eight.2 million euros on the gross revenue degree and 17.4 million euros on the EBITDA degree, primarily associated to the switch of the Longarone plant.
As reported final Tuesday, Safilo finalized the sale of its storied manufacturing complicated in Longarone, within the Veneto area, one of many nation’s key eyewear manufacturing districts, to Thélios, the LVMH Moët Hennessy Louis Vuitton-owned eyewear producer, and Innovatek, owned by entrepreneur Carlo Fulchir.
Within the 9 months 2023, Safilo’s free money circulate stood at 15.8 million euros, in comparison with an absorption of 17.8 million euros final yr.
“On this quarter, we achieved one other vital growth of the gross margin, whereas the working efficiency was quickly restricted by the upper incidence of working prices, reflecting, particularly, the continuation of our IT investments to speed up the group’s digital transformation and advertising actions to assist the longer term improvement of our residence manufacturers,” stated Trocchia.
Nevertheless, “even in a weak and unsure market atmosphere, our actions proceed to deal with the implementation of these initiatives that may enable us to attain our medium-term targets,” he continued. “It was significantly vital for us to maintain the constructive money technology initiated within the first half of the yr, a aim that we achieved due to good working capital administration.”
Requested about Safilo’s efficiency in October, Trocchia stated it was “a small month” for the group, that continued to indicate softness in wholesale within the U.S., with Europe “nonetheless barely constructive” and Asia rising. “November is essential to know the direct-to-consumer enterprise for Blenders and Smith,” he stated.
Within the third quarter, gross sales in North America fell 12.2 p.c to 109.6 million euros, closely impacted by the strengthening of the euro in opposition to the greenback. Within the 9 months, Safilo’s gross sales in North America have been down 11 p.c to 341.1 million euros.
The wholesale channel “stays nervous in North America; they’re very acutely aware of money and prudent now,” stated Trocchia.
In Europe within the third quarter gross sales have been down 10.7 p.c to 85.4 million euros. Chief monetary officer Michele Melotti spoke of a normalization of traits in markets resembling Italy, France and Spain, which, greater than others, benefited from a robust solar season final yr, whereas the German market remained negatively affected by the weak point of the IPP (web pure gamers) channel.
Within the 9 months, Safilo’s gross sales in Europe have been down 3.5 p.c to 321.1 million euros. Within the interval, gross sales in Europe, internet of the enterprise within the former GrandVision chains, grew by about 7 p.c at fixed alternate charges.
In Asia and Pacific, gross sales within the third quarter amounted to fifteen.2 million euros, down 5.9 p.c pushed by the constructive progress of the enterprise in China and different key markets within the area, and by the sports activities enterprise, which, with Smith, is now one among Safilo’s most important development drivers within the space.
Within the 9 months, gross sales in Asia and Pacific have been up 6 p.c to 43.8 million euros.
In the remainder of the world, gross sales within the third quarter reached 24.8 million euros, up 3.9 p.c, primarily led by the additional improvement of Carrera in India and the Center East, whereas enterprise traits in Latin America was constructive in Mexico, however softer in Brazil. Within the 9 months, gross sales reached 79.2 million euros, up 7.3 p.c.
Requested about market rumors surrounding a possible sale of Marcolin by Pai Companions and whether or not Safilo may very well be excited about an acquisition, Trocchia demurred, saying the “asset has worth, we’ll see the developments over the subsequent few months.”
The chief touted Blenders’ partnerships with Coach Prime and with System 1, with the Pink Bull group, that are increasing the shopper base of the eyewear model and have been surprisingly efficient when it comes to model consciousness, he admitted. “This isn’t a one-off and we’re in open discussions with Coach Prime to make [the deal] even greater,” stated Trocchia.
As of Sept. 30, internet debt amounted to 96 million euros in contrast with 113.4 million euros on the finish of 2022.
