Salvatore Ferragamo booked sales of €409.0 million in the fourth quarter of 2015, up by 9.0 percent in euros and by 2.1 percent in local currencies, against financial analysts' expectations of a turnover of €391.0 million. In the full year, the top line reached €1,430 million, up by 7.4 percent despite a currency hedging loss of €51 million. At constant currency rates, the company's annual turnover rose by 1.3 percent.
Footwear sales increased by 5.7 percent to €600.8 million for the year, but declined by 0.9 percent at constant currency rates. Leathergoods and handbags went up by 12.1 percent at current exchange and by 6.4 percent at constant rates, reaching €528.8 million.
By geography, full-year sales totaled €380.6 million in Europe, up by 7.3 percent in euros and by 6.0 percent in local currencies. In the fourth quarter, sales rose by about 9 percent in euros in the region.
In North America, the turnover was up by 9.5 percent to €333.8 million, but fell by 1.6 percent at constant currency rates, due to lower tourist flows. Fourth-quarter sales were up by 8 percent in euros and by 3 percent in local currencies.
In Japan, revenues reached €127.3 million, up by 14.2 percent in euros and by 15.0 percent in yen, thanks to a growing influx of Chinese tourists. Reported sales were up by 18 percent in the country during the quarter and rose by 13 percent at constant currency rates.
In the rest of Asia-Pacific, sales grew by 4.0 percent to €516.0 million, but were down by 3.3 percent in local currencies. In the fourth quarter, reported sales were up by more than 8 percent despite a deterioration in Hong Kong.
In Ferragamo's own stores in mainland China, sales were up by 10 percent at actual currency rates and by 1 percent at constant rates during the fourth quarter, after drops of 3 percent in euros and 7 percent in yuan in the third quarter. For the whole of 2015, the company's directly-operated stores (DOS) in mainland China rose by 10 percent.
Sales in Latin America rose by 12.0 percent to €72.4 million in the full year, with an 8.5 percent increase at constant currency rates. In the quarter, sales were up by a reported 4 percent and by 3 percent in local currencies.
The company's global retail sales totaled €892.1 million, up by 7.1 percent at actual currency rates and by 1.2 percent at constant rates. Comparable store sales decreased by 3 percent in 2015 and by 4 percent in the final quarter. Wholesale revenue increased by 7.3 percent to €513.6 million, and they only rose by 1.3 percent at constant exchange rates.
The company is scheduled to disclose full-year results on March 17, with analysts expecting gross operating profit, or Ebitda, of around €315 million and net profit of about €165 million.
For 2016, the company continues to expect to grow faster than the market. It is still aiming for an Ebitda margin of about 25 percent in 2018 against an estimated ratio of 22 percent in 2015.
In an interview with Reuters, Ferragamo's chief executive, Michele Norsa, said he foresees improved results in 2016. He said that he would like to see Ferragamo's sales increase at least twice as much as the world economy. The World Bank expects global economic growth to reach a rate of 2.9 percent this year.
The Italian daily Il Sole 24 Ore added that Ferragamo is believed to have invested about €90 million in 2015, of which two-thirds went to expand and refurbish its stores. Last year, the group added 18 DOS and one franchised shop, boosting the number of mono-brand stores to 391 DOS and 271 managed by third parties at the end of December.
The group is scheduled to add 15-17 more stores this year and to invest in a new logistics site at Osmannoro, near Florence. Its cash flow should be sufficient to guarantee and even possibly improve its dividend payments, according to Il Sole 24 Ore. Reuters reported that Ferragamo could open stores in Australia, Mexico, Bolivia, Paraguay, Korea and Cambodia.
Norsa also noted that the group does not have a store in Iran despite a significant wholesale business in the country. He expects Iran's economy to pick up, possibly rapidly, after the end of Western economic sanctions against the country.