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Ferragamo blamed the continued slump in sales on a “challenging macroeconomic and consumer environment,” particularly in Asia. It warned that a similar situation is expected in the fourth quarter.
The Italian company’s sales for the third quarter of 2024 amounted to 221 million euros, a decrease of 7.2% year-on-year, excluding currency effects. Sales fell 9.8% in the first nine months of the fiscal year. The company expects full-year results to be at the “lower end of analysts’ expectations.”
“Our results in the third quarter were impacted by a challenging macroeconomic and consumer environment, and we expect this trend to continue in the second half of the year,” CEO Marco Gobbetti said in a statement. Ta. “The decline in consumer confidence is most pronounced in the Asia-Pacific region and is the main phenomenon impacting our sales performance. Secondary channels have also been affected by low traffic, which continues to impact the wholesale environment. Masu.”
Direct-to-consumer (DTC) sales were down 5.7% in the third quarter, and wholesale sales were down 12.8% due to weaker-than-expected demand, particularly in the United States.
EMEA sales increased 1.2% in the third quarter. Sales in the Asia-Pacific region decreased by 20.5% year-on-year, while sales in the Japanese market increased by 6.7%. In North America, sales decreased 7.9% due to a weak wholesale market, but in Latin America, sales increased 9% due to DTC demand.
The luxury goods market has been in a downturn since last year, and even major companies like LVMH and Kering have been hurt. After increasing sales in 2022 under Gobbetti’s turnaround plan (despite lower profits that year), Ferragamo’s sales have been declining since the first quarter of 2023.
“The current situation is putting pressure on our sales and profitability and delaying the timing of our financial goals,” Gobbetti said on Tuesday. “Along with our marketing and retail efforts, we aim to maximize the brand’s potential through increasing new audience engagement with our core products and continuing to deliver unique stories and enhanced in-store and online experiences. We are working hard to enhance our offer while maintaining strong operational discipline.”
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