WMIDO

Safilo: Trading Update Q3 and First Nine Months of 2024

Written by MIDO | 11/08/2024

In Q3 2024, Safilo continued to increase margins and cash generation despite weaker summer sales.

 

The Board of Directors of Safilo Group S.p.A. reviewed and approved the key performance indicators for Q3 and the first nine months of 2024.

 

Q3 2024

  • Net sales: €225.4 million, -3.4% at constant exchange rates
  • Gross margin: 59.1%, +140 basis points vs. 57.7%¹
  • Adjusted EBITDA margin¹: 7.9%, +20 basis points vs. 7.7%
  • Positive Free Cash Flow of €16.9 million

First Nine Months 2024:

  • Net sales: €757.4 million, -2.7% at constant exchange rates
  • Gross margin: 59.7%, +120 basis points vs. 58.5%¹
  • Adjusted EBITDA margin¹: 10.0%, +40 basis points vs. 9.6%
  • Net debt at €96.1 million as of the end of September, down from €100.4 million at the end of June

 

NET SALES PERFORMANCE

 

In Q3, Safilo's net sales amounted to €225.4 million, down by 3.4% at constant exchange rates and by 4.1% at current exchange rates, compared to €235.0 million in Q3 2023. Following a subdued business performance in May and June, Q3 sales were marked by a modest sun season in July and August, followed by a more promising start to the order intake for the autumn/winter season in September. Market conditions did not allow the Group to offset the exit of the Jimmy Choo brand.

 

Safilo closed the first nine months of 2024 with net revenue of €757.4 million, down by 2.7% at constant exchange rates and by 3.5% at current exchange rates compared to €785.1 million in the first nine months of 2023. As in Q3, the decline in the first nine months was entirely due to the exit of Jimmy Choo. Excluding this impact, the revenue trend remained broadly stable compared to the same period in 2023.

 

In Q3 2024:

  • Gross profit was €133.3 million, showing a slight contraction of 1.6% compared to the adjusted gross profit¹ recorded in Q3 2023. The gross margin improved by 140 basis points, reaching 59.1% of sales, compared to the adjusted level¹ of 57.7% in Q3 2023.
  • Selling and marketing, general, and administrative expenses decreased by 2.8%, mainly driven by the continued normalization of IT investments. During the period, the ratio of selling and marketing, general, and administrative expenses to revenue increased due to unfavorable operating leverage.
  • Adjusted EBITDA¹ was €17.8 million, with a slight contraction of 1.7% compared to Q3 2023, while the adjusted EBITDA margin¹ improved by 20 basis points, reaching 7.9% of sales.

In the first nine months of 2024, despite the unfavorable revenue trend, Safilo successfully consolidated the significant growth of gross profit margin, also improving the adjusted operational performance¹ through effective cost management.