MILAN — Salvatore Ferragamo SpA said net profits rose 2 percent to 27 million euros, or $37 million, in the first three months of the year, driven by growth in all main markets and in leather accessories and footwear.
Profits also were boosted by a 1 million euro, or $1.37 million, minority interest.
Sales in the quarter ended March 31 gained 6 percent to 299 million euros, or $409.6 million, compared with 282 million euros, or $372.2 million, in the same period last year.
Operating profit rose 7 percent to 42 million euros, or $57.5 million.
Dollar amounts are converted at average exchange for the periods to which they refer.
The Asia-Pacific region was once again the group’s main market, increasing 5.3 percent in the period and accounting for 36.4 percent of total sales. There was a significant contribution from the retail channel in China, which recorded more than 10 percent growth. “Mainland China continues its double-digit gains and is over-performing at retail,” said chief executive officer Michele Norsa during a conference call with analysts.
Europe, despite the geopolitical tensions which negatively impacted global tourist flows, was up 9.2 percent.
“Europe was penalized at the end of the quarter by the strong euro currency and the deterioration of the Ukraine and Russian crisis,” said Norsa. Russians accounted for 15 to 20 percent of sales in most European cities, he said, and “if there is a decrease it will probably impact a few percentage points in specific cities,” with London faring “better than Italy or the French Riviera.”
The performance in North America was dented by the harsh winter weather and inched up 1.2 percent.
“The U.S. market is expected to be strong in the rest of the year. We maintain positive expectations for the rest of the year,” said Norsa.
“The U.S. comparison is challenging with last year but we expect a nice performance, a solid high-single-digit growth given a double-digit growth in April and May,” echoed chief financial officer Ernesto Greco.
Japan was up 8.7 percent, but would have risen 18.1 percent at constant exchange. “Japan continues to be a two-speed market, with a very strong March, up 30 percent, ahead of the planned tax increase, with April reacting the opposite way, slowing down double-digits and May close to normal with things easing in the next weeks,” noted Norsa.
Addressing the currency headwinds, Greco said the company had “balanced with hedging,” but that it expects “to increase prices with the summer collection in Japan, a 4 percent increase, and with the next collection. We slowly absorb the negative forex.”
Revenues in Central and South America gained 9.3 percent but would have grown 18.7 percent at constant exchange. “Mexico is a driving force and Brazil is improving close to the sport event [FIFA World Cup], and is another contributor in the region,” said Norsa.
The company said that the business trends seen in the first quarter “justify expectations for growth also throughout 2014, in the absence of severely unfavorable market conditions.”
At the end of March, the group had 356 directly operated stores. Revenues at the retail distribution channel in the first quarter were up 3.9 percent, while the wholesale channel gained 9.3 percent.
Handbags and leather accessories gained 15.3 percent and footwear was up 4.6 percent, together accounting for 77 percent of the total. “Leather products are the star, including bags, one of the winning categories for the year,” said Norsa. He also pointed to men’s shoes, which he defined as “very strong.”
Apparel was down 9.6 percent and fragrances dropped 2.2 percent. The decrease in the latter was “justified by a strong comp basis and shipping problems in East Europe and China, bureaucratic problems that were solved in April,” said the executive, adding that he expected “very solid single-digit growth from this quarter; we are optimistic about fragrances.”
He added that “the exceptional trend of the euro hopefully will be limited in coming months.”
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty