MILAN — Gains at all product divisions, led by its footwear and leather goods categories, and a boost in Greater China, helped Aeffe SpA see a 46.9 percent jump in net profit in the first quarter. Earnings reached 5.2 million euros, or $5.8 million, compared with a net profit of 3.5 million euros, or $4.8 million, in the same period last year.
In the three months ended March 31, sales climbed 5.3 percent to 71.2 million euros, or $80.4 million, compared with 67.6 million euros, or $92.6 million.
The publicly listed company controls the Alberta Ferretti, Moschino and Pollini brands, and produces and distributes collections for labels including Emanuel Ungaro, designed by Fausto Puglisi and Cédric Charlier.
“The path of growth in sales and profitability in the first quarter of 2015 confirms the positive outlook for the current year, supported by a 7 percent increase in the orders backlog for the next autumn/winter collections,” said executive chairman Massimo Ferretti. Managing director and chief financial officer Marcello Tassinari told WWD that, if not for a decrease in Russia, orders would have grown 15 percent.
In the first quarter of the year, apparel revenues were up 4.8 percent to 55.2 million euros, or $62.3 million. The footwear and leather goods division gained 23.7 percent to 24.5 million euros, or $27.6 million.
“Among the significant results achieved, we highlight the strengthening of the visibility and positioning of the group’s brands, the progression of the accessories business and the development of the international presence, except for the difficult Russian context,” said Ferretti.
Hurt by the domestic challenges, in the quarter, the Russian market declined 52.9 percent to 2.4 million euros, or $2.7 million, representing 3.4 percent of sales.
Sales in Italy rose 10.7 percent to 31.9 million euros, or $36 million, representing 44.9 percent of sales.
Europe was down 2.7 percent to 16.5 million euros, or $18.6 million, contributing to 23.2 percent of consolidated sales.
Sales in the U.S. grew 48.3 percent to 5.2 million euros, or $5.8 million, contributing to 7.3 percent of total.
Japan rose 24.7 percent to 1.8 million euros, or $2 million, accounting for 2.6 percent of sales.
The Rest of the World area rose 13.8 percent to 13.3 million euros, or $15 million, representing 18.7 percent of sales, boosted by a 68 percent growth in Greater China.
“These first three months are the offspring of the spring orders and fruits of the changes at Moschino, with the arrival of Jeremy Scott as creative director and Alberta Ferretti’s focus on her namesake line, said Tassinari. Developing accessories for Moschino is also a priority. By mid-June, the fourth Moschino boutique is to open in Milan, where the company hopes to “benefit from the flows of tourists for Expo,” the international exhibition running until the end of October, and in September, a store for the brand will open in New York.
Tassinari said that the company is planning the opening of 10 franchised stores, for different brands, mainly in Asia, by the end of the year.
The executive said Aeffe expects beneficial effects from the new course of Philosophy, following the arrival of Lorenzo Serafini as creative director and the debut of his first collection in February. “The feedback so far has been extremely positive,” he observed, with Barneys buying the label’s fall collections for seven doors, as well as Luisa Via Roma and Bonmarché.
Earnings before interest, taxes, depreciation and amortization rose 17 percent to 12.5 million euros, or $14.1 million.
Operating profit totaled 9.4 million euros, or $10.6 million, up 21.5 percent.
Dollar amounts were converted at average exchange for the periods to which they refer.
In terms of currencies, Tassinari said the weak euro will allow the company to be more competitive in the U.S. but benefits will be more visible in the next quarters, compared to the first quarter.
As of March 31, net debt stood at 95.4 million euros, or $107.8 million, compared with 83.3 million euros, or $114.1 million at the end of March last year.