Salvatore Ferragamo announced a 69.8 percent increase in net profit to $143.6 million for the past year, including minority interests, with a 35.1 percent increase in the fourth quarter. Operating earnings rose for the year by 62.4 percent before amortization (Ebitda) to €183.7 million, and by 81.2 percent before interest (Ebit) to €156.2 million.
As previously reported, the Italian company's revenues rose by 26.2 percent in 2011 to €986.4 million, with footwear sales rising by 32.6 percent in euros and by 30.6 percent in constant currencies to represent 42.9 percent of the total turnover. At constant exchange rates, sales went up by 24.1 percent, with increases of 19.1 percent at retail and 37.8 percent at wholesale. Retail sales still represented 66.7 percent of the total turnover.
The management expects to post significant growth again this year. Financial analysts forecast the luxury group's sales at more than €1.1 billion in 2012 and expect further improvement in the gross and Ebitda margins.
In 2011, Ferragamo widened the gross margin to 64.2 percent from 63.0 percent, the Ebitda margin to 18.6 percent from 14.5 percent and the Ebit margin to 15.9 percent from 11.1 percent.
The sharply improved results came in spite of the costs of €5 million linked to the company's stock market introduction, a 32 percent increase in spending on communication, and a 94.8 percent increase in investments to €42.3 million, mainly for the expansion and renovation of its store network, including its e-commerce operations.
New online stores were launched in South Korea, Turkey, Ukraine, Mexico and Canada, adding to Ferragamo's e-commerce operations in Europe and the U.S. More than 20 new stores were opened by the group last year, and 10 of them were opened in mainland China, where the company now operates 60 stores in 34 cities. Sales at Ferragamo's Chinese stores jumped by 44 percent last year.
Greater China has become the biggest single market for the company. According to Ferragamo, the international luxury goods market is witnessing a polarization of customers toward high-end brands with solid and timeless heritage values and a global distribution structure. This also goes for tourists coming from emerging markets who shop in the more mature markets.
During the general annual meeting scheduled for April 26, the company will ask shareholders to approve the granting of up to 500,000 shares to managers if they reach objectives set in a three-year plan ending in 2014. The board is proposing to pay an annual dividend of €0.28 per share.