Ferragamo sales improve in February after weak start to year

By Elisa Anzolin

MILAN (Reuters) -Sales at Salvatore Ferragamo continued to weaken year-on-year in January after dragging operating profit down 44% profit in 2023, but stabilised in February, the chief executive of the Italian luxury goods group said on Wednesday.

The family-controlled luxury shoemaker is seeking to revive its fortunes, and adapt to fast-changing shoppers' tastes, under former Burberry CEO Marco Gobbetti, who took over in 2022.

After a soft start to the year, particularly in Asia and the United States, "February was better" with retail sales in line with last year, Gobbetti told analysts.

"There were some positive calendar effects, for the timing of the Chinese New Year, which was negative in January, but also mainly due to recovery that we saw in Europe, Japan and the United States," he added.

Earnings before interest and tax (EBIT) totalled 72 million euros ($79 million) in 2023, the group said on Wednesday, down from 128 million euros a year earlier though ahead of forecasts.

Analysts expected 2023 EBIT to drop to 63 million euros, according to a median LSEG consensus forecast.

The company reported in January an 8.1% drop in sales, prompting CEO Gobbetti to warn that hitting turnaround goals could take longer than anticipated.

Operating costs declined slightly, but grew as proportion of revenues, as the group "continued to invest, as planned, in marketing and communication."

Gobbetti confirmed in a statement that "the current market backdrop" affected "the timing of our initial assumptions."

However, "we continue to pursue our growth ambition, while also protecting profitability through ongoing attention to the quality of sales and disciplined focus on costs," he said.

Ferragamo said it was cutting its proposed dividend to 0.10 euros per share from 0.28 euros the previous year.

($1 = 0.9169 euros)

(Reporting by Elisa AnzolinEditing by Keith Weir, Valentina Za and Diane Craft)