Dive Brief:
- Salvatore Ferragamo SpA reported a Q1 2025 revenue decline of 2.6% of 221 million euros, or about $247 million, for the period ended March 31, according to a Wednesday earnings release.
- The company’s biggest pain point for the quarter was a 13% sales decline in the Asia Pacific, excluding Japan, which represents 29.3% of its regional business. The company attributed the downturn to “overall weak consumer environment significantly impacting traffic.”
- Meanwhile, overall net sales in Ferragamo’s DTC channel slipped 3.6% to 164 million euros, while wholesale channel sales rose 7.9% to 54 million euros for the period.
Dive Insight:
Ferragamo has been without a CEO since March, when Marco Gobbetti left by mutual agreement and ended his relationship with the company. Chairman Leonardo Ferragamo has been given executive powers in the interim, and is currently supported by a transition chairman advisory committee while the company searches for new leadership.
Financially, Ferragamo’s first quarter looks significantly different this year than it did a year ago, when the company posted an 18.3% revenue slide, led by a 38.3% wholesale channel decline and further hurt by an 11.1% DTC sales dip.
This year, the company said it’s looking to focus its product strategy as well as add “different price points and functions in all categories.”
Ferragamo said in the release that its main priority for the beginning of 2025 was its leather core business. The company plans to further consolidate its handbag category and strengthen the presence of its Hug bag, first introduced in 2023.
In addition, the company said it was working to optimize its women’s footwear division.
Ferragamo’s footwear division suffered the biggest loss for the quarter, falling 9.6% to about 92 thousand euros. That decline was directly offset by a 9.6% increase to more than 96 thousand euros in the leather goods division.
Apparel dropped 3% to about 13 thousand euros, while the company’s silk and other goods division was down 1.9% to about 16 thousand euros.
Separate from its losses in the Asia Pacific region, Ferragamo posted a 4.1% sales increase in Japan, which represents 9.1% of its business. The company said the uptick was mainly driven by tourists’ purchases.
Sales in Europe, the Middle East and Africa rose 9.1% in Q1. The region represents about 25% of Ferragamo’s total net sales and saw upticks at both its DTC and wholesale channels due to increased U.S. tourist spending and more local purchases.
North America, which accounts for just under 29% of the company’s business, posted DTC and wholesale gains that led to an overall sales increase of 3.7% for the region.
Elsewhere, the company’s sales in Central and South America dropped 0.8%, and that region represents 7.6% of Ferragamo’s business.
“The difficult macroeconomic environment, weighing on consumers’ confidence, impacted the first quarter’s performance, driving a decrease in traffic, only partly offset by higher conversion rate and increase in the average ticket,” the company said in its release, adding that it was mindful “of the increasingly uncertain scenario.”
