Safilo Q3 sales increase 7.4 percent

REPORT_ In the third quarter, Safilo Group confirmed the increase in sales at constant exchange rates of 7.4 percent already recorded in the second quarter, taking the first nine-month’s top line growth to 5.5 percent. The gross profit margin for the first nine months stood at 62.3 percent, after a further progression registered by the same profit margin in the third quarter compared to the corresponding period of 2013.

The Group net profit showed an evident improvement both in the third quarter and in the first nine months, equal to over 37.9 percent and over 24 percent respectively.

Commenting on the results, Luisa Delgado, CEO of Safilo Group, said, “Economic results in the third quarter confirm the progress of our product centered strategic and operational direction. Brand driven product quality and creative product design have continued to be our hallmark in our latest collections, as evidenced for example by Dior’s iconic sun trendsetters, and the transformation of Fendi eyewear, our most recently acquired license.”

In the quarter, turnover for the wholesale business increased to 239.2 million euros (296 million dollars) from 222.5 million euros (275.2 million dollars) in the third quarter of 2013 representing over 7.5 percent rise at current and constant exchange rates, while in the first nine months, turnover was up 3.3 percent or over 5.7 percent at constant exchange rates. From an economic standpoint, Safilo closed the third quarter of 2014 with a gross profit increase of 8.5 percent, with the gross margin improving by 60 basis points to 60.1 percent from 59.5 percent of the third quarter of 2013.

The North-American market was the growth driver of the quarter, owing to the positive performance of the brand portfolio in the independent optician channel and in the department stores. Sales trends in the European countries which outperformed in the first part of the year, namely France, Germany and Spain, were also very positive, whereas the UK business was affected by a difficult comparison base, given the double digit growth recorded in the third quarter of 2013. Sales in emerging markets accelerated the pace of growth recorded in the first half of the year, to around over 27 percent with strong performance of the Chinese and Brazilian markets.

In the American market, revenues for the third quarter were up 14.1 percent. In the first nine months, regional sales went up 3.3 percent at current exchange rates and 7.3 percent at constant exchange rates. Quarterly sales for Solstice stores in the United States were up 5.4 percent. In the first nine months of 2014, the sales performance of the 130 US stores was in line with the previous year moving up over 2.9 percent at constant exchange rates. In the European market, Group turnover for the third quarter increased over 1.9 percent at current exchange rates and over 1.7 percent at constant exchange rates. For the first nine months of 2014, regional revenues grew by 4.7 percent.

In Asia, the third quarter ended with revenues going down 3.7 percent at current exchange rates or 4.6 percent at constant exchange rates. In the first nine months of the year, Safilo’s Asian business recorded revenues were down 4 percent at current exchange rates or below 0.9 percent at constant exchange rates.

The positive market trends were echoed by the good performance of the portfolio. Dior, Celine and Jimmy Choo, as well as Boss and Max Mara, excelled in the different areas of the fashion luxury segment, while Polaroid continued its strong development in the mass cool segment together with the growth of Kate Spade both in and out of the US market. The proprietary brand Smith also outgrew in the quarter as Safilo started a new integration plan to turn the brand into a global player in one of the fastest growing arenas, the sports and outdoor lifestyle segment.