MILAN — Growth in both its apparel and accessories divisions, as well as gains in the European and Italian markets and a jump in China helped boost Aeffe SpA’s profitability and revenues in the first quarter.
In the three months ended March 31, net profit climbed 39 percent to 11.3 million euros, compared with 8.1 million euros in the same period last year.
Earnings before interest, taxes, depreciation and amortization gained 32 percent to 20.3 million euros, with a 21.4 percent margin on sales.
Operating profit rose 39 percent to 17.3 million euros.
Revenues rose 19.7 percent to 95.2 million euros, compared with 79.6 million euros in the same period last year.
Aeffe, which is listed on the Star segment of the Italian market, controls the Alberta Ferretti brand; Philosophy di Lorenzo Serafini; Moschino, designed by Jeremy Scott, and Pollini, and produces and distributes collections for Cédric Charlier and Jeremy Scott.
“The group is focused on a constant organic growth path for proprietary brands and the continuous progression of revenues and profitability, both in prêt-à-porter and footwear and leather goods divisions, demonstrates the effectiveness of our stylistic proposal along with management and investments strategies implemented,” said executive chairman Massimo Ferretti. “Considering that the fall 2018 season sales campaign ended with an increase of 12 percent, we continue to look forward positively.”
In the quarter, revenues of the ready-to-wear division were up 17.5 percent to 72.1 million euros, while sales of footwear and leather goods rose 26.2 percent to 32 million euros.
Sales in Italy rose 18.2 percent to 45.3 million euros, representing 47.6 percent of total revenues.
Sales in Europe grew 14.9 percent to 20.6 million euros, accounting for 21.7 percent of total, driven especially by the good performance in the U.K., Germany and Spain.
The Russian market showed good recovery, gaining 12.6 percent to 2.8 million euros, representing 3 percent of sales.
The slowdown in the performance of department stores dented sales in the U.S., which posted a 16.8 percent decrease to 4.9 million euros, and accounting for 5.2 percent of total. At constant exchange rates, sales were down 11 percent.
In the Rest of the World area, the group’s sales totaled 21.5 million euros, amounting to 22.5 percent of total, and climbing 45.1 percent driven by Greater China, which showed a 67.8 percent jump.
By channel, wholesale revenues grew 23.8 percent to 71.1 million euros, accounting for 74.7 percent of total sales. Retail sales grew 8 percent to 21.5 million euros, contributing to 22.6 percent of total. Royalties increased by 19 percent to 2.5 million euros.
As of March 31, the number of directly operated stores remain unchanged, compared with the end of 2017, standing at 63, while franchised stores totaled 181 compared with 185 in the first quarter of 2017, due to closures in Italy and Spain.
The company in the period acquired a building in Capri, Italy, where it had been managing a directly operated Moschino store. This expense and other investments in the group’s store network contributed to capital expenditures of 5.1 million euros.
As of March 31, net financial debt stood at 53.8 million euros, compared with 64.4 million euros at the end of March last year, thanks to a better operating cash flow.