MILAN — The resilience of the European market amid adverse weather conditions, the performance of its Carrera and David Beckham licenses and improved North America sales bolstered Safilo Group even as sales declined in the first half.
The Padua, Italy-based group said Thursday that revenues fell to 532 million euros, down 3.3 percent from 550.1 million euros, in the same period last year, dragged down in part by the loss of its Jimmy Choo license, which ended at the end of December 2023. Adjusted net profit rose to 24.2 million euros compared to 6.9 million euros recorded in the first half of last year. The latter was dragged down last year by a charge of 8.6 million euros, due to the revaluation of the liability for options on the interests in Blenders. Safilo said positive drivers of the period included higher supply chain efficiency and the effect of its pricing strategy on sales.
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Operating performance recorded in the second quarter benefited from the ongoing normalization of IT investments and marketing and advertising expenses.
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In the first half, Safilo’s gross margin rose to 60 percent from 58.8 percent in the same period of 2023. Adjusted earnings before interest, taxes, depreciation and amortization margin inched higher to 10.8 percent from 10.4 percent.
“Notwithstanding a business environment, which remained challenging, the quarter was satisfactory for us at the economic level, with the gross margin confirming its 60 percent level and the adjusted EBITDA margin improving to a larger extent than in the first quarter,” chief executive officer Angelo Trocchia said in a statement.
Despite the improvement of its margins and bottom line, sales fell worldwide in the second quarter. Overall, sales amounted to 254.8 million euros, down from 263 million euros, compared to the same period of 2023, as adverse weather conditions hit the European market. The European market fell 0.3 percent in to 113.8 million euros. This was followed by North America, which was down 3.4 percent to 103.2 million euros. Asia Pacific plunged 12.1 percent in the same period to 14.5 million euros while the rest of the world category was down 8.9 percent to 23.3 million euros.
During a conference call with analysts on Thursday at the end of trading in Milan, Trocchia expressed confidence in the David Beckham license, for which it signed a perpetual license contract in May and which he now considers is one of its most “promising and profitable brands in its portfolio.”
“Today, our home brands, together with the Eyewear by David Beckham, already account for around 50 percent of sales,” he said.
Trocchia also commented on the potential of Safilo’s global eyewear licensing agreement with Marc Jacobs until December 2031, which he said has the potential for growth especially in its core market, the U.S.
Looking ahead, Trocchia said visibility “remains low” in terms of performance for the rest of the year but September sales will be a key indicator for full-year revenues when the new collections hit shelves worldwide.
Last month in New York, Marc Jacobs and Safilo Group introduced “The Sunglasses” eyewear collection for fall.
Enriching the contemporary line of Marc Jacobs eyewear, “The Sunglasses” are the first eyewear pieces introduced in Jacobs’ successful “The” Items collection (i.e., The Totebag), which was introduced in 2019 and now comprises a large assortment of bags, wallets and accessories. Jacobs has previously done sunglasses with Safilo, but this is a special range.