MILAN — A strong performance in the U.S. and Europe helped Aeffe SpA more than double its net profit and push margins up by 45 percent in the first quarter of the year.
Aeffe is listed on the STAR segment of the Milan Bourse and comprises the Alberta Ferretti, Moschino, Philosophy di Lorenzo Serafini and Pollini brands.
In the three months ended March 31, net profit totaled 8.9 million euros, compared with 3.7 million euros in the same period last year.
Revenues amounted to 101.6 million euros, up 26.8 percent compared with 80.1 million euros at the end of March last year. Sales of the ready-to-wear division amounted to 67.7 million euros, up 28.4 percent.
Revenues of the footwear and leather goods division rose 28.8 percent to 46.2 million euros.
Earnings before interest, taxes, depreciation and amortization jumped 45 percent to 20.4 million euros, or 20 percent of revenues, compared with 14.1 million euros last year, lifted by a higher percentage incidence of full-price sales, both in the wholesale and retail channels, and the lower incidence of fixed costs which, although higher than in the first quarter of 2021 had a lower percentage incidence compared to turnover.
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“The first quarter of 2022 confirmed the trends of the financial year 2021 with a significant growth in revenues and a more than proportional progression in profitability, results obtained thanks to the good performance of all our brands together with the benefits related to the structural efficiency of the business model implemented over the last two years,” said executive chairman Massimo Ferretti. “In addition, despite the uncertainty linked to the geopolitical tensions of the ongoing conflict in Ukraine, the 9 percent growth in order intake for collections witnesses the appreciation of our customers for the group’s brands.”
Ferretti also touted the group’s new strategic direction for the Moschino brand and the direct management of its distribution in the Chinese market, which will materialize in the next quarter.
Last year, the company took full control of Moschino, paying 66.6 million euros for the 30 percent stake in the brand it didn’t own. It also acquired the license to produce and distribute the Love Moschino collections of women’s apparel in-house for 3.6 million euros.
Aeffe took control of Moschino’s distribution in mainland China, signaling the increasing relevance of that market for the label. This involved around 20 stores, which have been operated for the past 10 years by Scienward Fashion and Luxury (Shanghai) Co. Ltd. In addition, Moschino will open four franchised stores with a new partner. The company expects to have 30 directly operated stores and 22 franchised units in China in five years.
As reported, Moschino, which is designed by Jeremy Scott, is returning to present its menswear collection in Milan on June 19 during the city’s Men’s Fashion Week after years of showing in cities including Los Angeles, New York and Rome.
In the first quarter, consolidated operating profit amounted to 14.2 million euros, compared to 7.7 million euros in 2021.
Sales in Italy were up 24.6 percent to 42.7 million euros, boosted by a strong performance of the wholesale channel. The retail channel also recorded a 68 percent increase compared to the first quarter of 2021.
Revenues in Europe climbed 37.5 percent, representing 31.1 percent of the total, mainly due to the positive trend in the U.K. and in Germany in the wholesale channel. Retail recovered compared to the first quarter of 2021 with a 116 percent jump.
In Asia and in the Rest of the World area, sales decreased 1.2 percent to 17.6 million euros, representing 17.3 percent of the total.
In particular, Greater China saw a slowdown before Aeffe took over direct management of distribution.
Sales in America climbed 91.7 percent to 9.6 million euros, accounting for 9.5 percent of the total.
Sales of the wholesale channel, which represents 76.8 percent of the total at 78 million euros, were up 20.1 percent.
The retail channel, accounting for 19.2 percent of the total, or 19.5 million euros, was up 61.2 percent. The company has 57 directly operated stores and 143 franchised units and there were no changes in the period.
E-commerce sales, considered separately, recorded a positive trend in the quarter after two years of strong growth, with double-digit growth.
Royalties grew 33 percent to 3.8 million euros, accounting for 4 percent of the total.
As of March 31, financial debt stood at 100 million euros net of the IFRS 16 effect, compared with 57.3 million euros at the end of March last year, considering the acquisition of Moschino and its license. Net of these extraordinary effects, the net financial position would have improved by 27.5 million euros, thanks to the better economic results achieved and the effective management of working capital.