Revenues at Ferragamo down 17% in Q1, hit by China

Revenues at Italian luxury group Salvatore Ferragamo fell 16.6% at constant exchange rates in the first quarter, with China proving difficult and amid a general slowdown in sales in all geographies and channels.

“Over the quarter, our performance was impacted by continued volatility in the Chinese market, as well as a persisting weakness in wholesale and travel retail, further compounded by an unfavourable comparison,” Chief Executive Marco Gobbetti said in a statement on Thursday.

Revenues totalled 227 million euros ($244.5 million) in the first three months of the year, below analyst expectations of 237 million euros according a LSEG consensus.

In April, sales in the direct-to-consumer channel were slightly negative, but the trend was improving, Gobbetti said in a conference call with analysts, adding that the revenues in the February to April period for that channel were broadly flat.

However the CEO, who said he wanted to prioritise top-line performance, does not see the gross margin getting worse.

“We are seeing a difficult demand in China, customers are rather worried about the macroeconomic situation”, he said, adding that the sales trend in March and April in Greater China was overall quite negative.

Gobbetti added that on a brighter note, the direct-to-consumer sales trend in Europe was improving.