Salvatore Ferragamo told investors that it has a “cautious outlook” about its performance in 2017, which it sees as a “transition year” during which the Italian company will enhance its product development, rationalize its retail business and normalize inventory levels. The company confirmed the mid-term targets it had released in February, which call for raising sales at double the growth rate of the market and for an increase of about two percentage points in the gross margin.
At a recent meeting with investors, Ferragamo's new financial director, Ugo Giorgelli, reportedly revealed that the company's profitability will be depressed by high inventory levels stemming from past collections, but pointed out that recent collections have been performing well.
The report came from an investment broker, Websim, which concluded that the group's woes should be temporary. Ferragamo has not released its results for the first-quarter, but Websim expects the group to post a 7 percent drop in wholesale revenues and a 3 percent increase in retail sales for the first half of the year, leading to a 15 percent drop in the Ebitda to to €141 million for the six-month period.
For the full financial year, Websim anticipates that the top line will rise slightly to €1,475 million from €1,438 million in 2016, while the company's Ebitda is expected to fall to €298 million from €324 million. The net profit should decline to €179 million from €198 million. The broker predicts a recovery from 2018, with Ebitda rising to €342 million and the bottom line going up to €211 million, as sales would increase to €1,548 million.
Meanwhile, Ferragamo has unveiled the first collection of women's shoes designed by Paul Andrew. In a change of strategy, Ferragamo launched on May 22 a section of its website dedicated to its autumn/winter women's collection. The line designed by Andrew includes a much-applauded reinterpretation of the famous F heel construction designed by Salvatore Ferragamo himself for an “invisible” sandal patented in 1947.