Safilo Approves Q3 and YTD Financial Results

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PADUA, Italy—The Board of Directors of Safilo Group S.p.A. (SFL.MI) have approved the results of the third quarter and first nine months of 2013, ended Sept. 30. The third quarter of 2013 ended with a group net profit of €1.7 million which compared to the loss of €0.6 million for the same quarter of 2012. It is to be highlighted that Safilo returned to a profit in the third quarter for the first time since 2007.

Group net sales for the third quarter of 2013 totaled €243.4 million versus €249.1 million in the same quarter of 2012, a decline of 2.3 percent. The company noted that “the organic business more than offset the significant negative impact of the absence of the Armani brands, phased out at the end of 2012.” Sales for the wholesale business were €222.5 million in the quarter versus €228.2 million for the quarter of 2012, a decrease of 2.5 percent. Organic sales growth in the core sunglass and prescription frame segments was up approximately 17 percent for the quarter, according to the company.

Geographically, Europe with France, Germany and the U.K. in the lead was the continued main driver of Safilo’s growth in the third quarter. Spain and Portugal also made up ground, while the independent opticians channel in Italy showed continued softness.

Wholesale turnover in the American market in the third quarter amounted to €88.8 million, compared to €94.8 million of the same period of 2012, a decrease of 6.3 percent, while the 133 directly operated Solstice stores in the U.S. recorded sales of €20.9 million, up 6.1 percent. The like-for-like performance, based on the same number of stores, improved 3.5 percent in the third quarter.

According to Safilo, the Americas performance was affected by the strengthening of the Euro against the U.S. dollar and the local currencies of Latin American countries. Safilo’s North American business continued to experience organic growth, both in terms of sales of prescription frames through independent opticians, the group’s principal distribution channel in the U.S, and in terms of sunglasses through the most important department stores, where Safilo registered an improvement with respect to the second quarter of the year, the company said.

“The results for the first nine months of 2013 show that we are about on track to deliver the year’s core objective, i.e. to offset the loss of the Armani license using our wide brand portfolio and strong customer relationships, while strengthening our gross and operating margins, and focusing on strong cash flows,” said Luisa Delgado, the new CEO of Safilo Group. “The results also show our further opportunities: expanding ‘where we play’ by building our own proprietary portfolio and our geographical footprint, and sharpening ‘how we win’ with further differentiated commercial and product supply strategies, simplified operations and e-enabled global integration. Our commitment to generate sustainable profitable growth forward is based on combining our historical strengths and leveraging systematically our opportunities with a long term view.”

Net sales for first nine months of 2013 reached €841.8 million, compared to €862.4 million for the same period of 2012, a decrease of 2.4 percent. Organic growth in the first nine months of 2013 equaled an increase of 10 percent, with the total turnover for the wholesale business amounting to €780.0 million, compared to €800.9 million in 2012, a decline of 2.6 percent. The Group net profit for the first nine months of 2013 reached €27.3 million, up 30.8 percent compared to the first nine months of 2012.

In the first nine months of 2013, the American wholesale business saw sales of €287.7 million, compared to €302.2 million of the same period of 2012, a decline of 4.7 percent.

In the same period, Solstice stores registered sales of €61.8 million, up 3.3 percent. The like-for-like performance, based on the same number of stores, improved 1.5 percent.