Safilo 2023 profit plunges 76 percent

Safilo Group closed the year 2023 with net sales of 1,024.7 million euros, down 2.3 percent at constant exchange and 4.8 percent at current exchange rates. Its full-year adjusted net profit declined by 76 percent to 14 million euros, while its adjusted core profit stood at 92 million euros, down 9.1 percent year on year.

In the year, the company said in a release, organic sales recorded a deviation of 1.3 percent, further approaching the level of revenues recorded in the previous year, despite the headwinds represented by the continuing weakness of the North American market, and the over 60 percent drop in revenues recorded in the former GrandVision chains.

In the fourth quarter, Safilo’s net sales stood at 239.6 million euros, up 2 percent at constant exchange but down 2.4 percent at current exchange rates and net of sales in the former GrandVision chains increased 3.6 percent.

Commenting on the company’s results, Angelo Trocchia, Safilo chief executive officer, said: “In a complex year like 2023, in which a tense and unstable geopolitical and macroeconomic environment added to our direct challenges, it was particularly important for us to achieve a level of revenue very close to the strong performance recorded in 2022, when growth, compared to pre-pandemic 2019, was 12 percent. ”

Review of Safilo’s 2023 and Q4 results

In 2023, Safilo’s sales in North America amounted to 452.9 million euros, down 6.4 percent at constant exchange and 9 at current exchange rates. Sales in Europe stood at 411.8 million euros, down 0.6 percent at constant exchange and 3.1 percent at current exchange rates.

In the year, sales in Asia Pacific reached 59.9 million euros, up 9.1 percent at constant exchange and 3.9 percent at current exchange, while in the Rest of the World at 100.1 million euros, increased 3.9 percent at constant exchange and 3.8 percent at current exchange rates.

The company added that key drivers of the positive performance were Boss, Ports and Polaroid in China and Hong Kong, and the strong development of Smith in both Australia and Japan, while Carrera and Tommy Hilfiger were the drivers of the double-digit growth recorded in the year by India and the Middle East.

In 2023, adjusted gross profit equalled 601.8 million euros, slightly up by 0.7 percent, while the adjusted gross margin improved by 320 basis points to 58.7 percent, adjusted EBITDA equalled 92 million euros and a margin on sales of 9 percent, down respectively 9.1 percent and 40 basis points compared to 2022.

The adjusted operating result equalled 49.6 million euros and a margin on sales of 4.8 percent, down respectively 7.4 percent and 20 basis points. The Group's adjusted net result, equal to 14 million euros, was down 76 percent.

Highlights of Safilo’s Q4

Safilo further said that the fourth quarter was characterised by the improved trends of the North American market, where sales stood at 111.9 million euros, up 3 percent at constant exchange and down 2.2 percent at current exchange due to growth of Blenders and Smith in their DTC channels.

In Europe, sales in the quarter, equal to 90.7 million euros, were back to a positive performance, up 2.5 percent at constant exchange and down 1.7 percent at current exchange rate.

On the emerging markets front, the Group's sales recorded Asia and Pacific sales of 16.2 million euros and a growth of 4.5 percent at constant exchange and drop of 0.9 percent at current exchange rates, while revenues in the Rest of the World, equal to 20.8 million euros, recorded a decline of 6.6 percent at constant exchange and 7.5 percent at current exchange due to a challenging comparison base for the Brazilian market. On the other hand, the main markets in the Middle East continued to grow in the quarter.

In the fourth quarter, Safilo's adjusted gross margin improved to 59.5 percent, adjusted gross profit amounted to 142.6 million euros, up 2.4 percent and adjusted EBITDA was equal to 16.5 million euros and a margin on sales of 6.9 percent, up respectively by 3.8 percent and 40 basis points.