PADUA, Italy—Safilo Group S.p.A. (SFLG.MI) has announced its third-quarter (Q3) financial results, demonstrating what the company calls soft trends in North America and Asia. In Q3 2024, Safilo reported net sales of €225.4 million, down 3.4 percent at constant exchange rates and 4.1 percent at current exchange rates compared with €235.0 million recorded in Q3 2023. "In the period, North America remained challenging, with the sports segment still subdued, awaiting the beginning of the winter season, and an eyewear market in which the gradual recovery of the wholesale business coincided with a slowdown in sales through online channels,” said Angelo Trocchia, Safilo chief executive officer.

He continued, “In such a complex market environment, it has been crucial to continue focusing on our long-term priorities, consolidating our path of economic and financial improvement. We are particularly pleased to have confirmed also in this quarter the growth of our gross margin, and to have improved our operating performance. We also achieved another period of financial efficiency, thanks to a good cash generation.”

After a soft performance in May and June, the company noted, third-quarter sales were marked by a modest sun season in July and August, followed by a more promising start to the fall/winter order collection in September. However, the company added, this did not allow the Group to counterbalance the exit of the Jimmy Choo brand. Brands including Carrera, David Beckham, Tommy Hilfiger, and Marc Jacobs experienced the most significant growth, while Polaroid and other brands were influenced by their higher exposure to sun products. In the sports segment, Smith’s performance remained affected by a still cautious market environment.

Sales in Europe in Q3 fell by 2.7 percent to €757.4 million at constant exchange rates, the company stated, and 3.5 percent at current exchange rates compared to €785.1 million recorded in the first 9 months of 2023. The company attributed the decline in the first 9 months entirely to the exit of Jimmy Choo.

In Q3 2024, sales in North America amounted to €103.7 million, down 4.3 percent at constant exchange rates and 5.3 percent at current exchange rates compared to Q3 2023, with the group attributing slower sales to varying trends across product categories and distribution channels. 

Wholesale revenues of prescription frames and sunglasses posted a good recovery, which the company attributes to the growth achieved by Carrera, BOSS, David Beckham, Tommy Hilfiger and Marc Jacobs. Additionally, the company said the market was instead subdued for sunglasses sales through online channels, and for the sports business, where clients and consumers maintained a cautious approach to purchases, awaiting the start of the winter season.

Gross profit amounted to €133.3 million, showing a slight decrease of 1.6 percent compared with the adjusted gross profit recorded in Q3 2023. The gross margin instead improved by 140 basis points, to 59.1 percent of sales from the adjusted level of 57.7 percent recorded in Q3 2023. The adjusted EBITDA amounted to €17.8 million, decreasing slightly by 1.7 percent compared to Q3 2023, while the adjusted EBITDA margin improved by 20 basis points compared to the same quarter of 2023 to 7.9 percent of sales.