PADUA, Italy—Safilo Group S.p.A. (SFLG.MI) has announced second quarter (Q2) and first half (H1) financial results, demonstrating improvement in H1 gross margins as well as North American eyewear performance, but with net sales down in both Q2 and H1. The first half of 2024 closed with net sales of €532.0 million, down 2.4 percent at constant exchange rates and 3.3 percent at current exchange rates compared with €550.1 million recorded in H1 2023, the company noted. In Q2 2024, Safilo's net sales amounted to €254.8 million, down 3.1 percent both at constant and current exchange rates compared with €263.0 million recorded in Q2 2023.

"We approached this first half of the year focused on our medium and long-term goals, reinvesting the positive operating cash flow in the continuous strengthening and development of our brand portfolio," said Angelo Trocchia, Safilo chief executive officer. "Today, our home brands, together with the Eyewear by David Beckham, already account for around 50 percent of sales, another important milestone that allows us to face with clarity and pragmatism both the challenges and opportunities of our industry.”

In Q2 2024, sales in North America amounted to €103.2 million, down 4.4 percent at constant exchange rates and 3.4 percent at current exchange rates compared with Q2 2023, the Group noted. In the United States, Q2 was a positive quarter for Carrera, driven by the success of its new women's collections, and for some of the Group’s core licenses: namely David Beckham, Carolina Herrera, Marc Jacobs and Tommy Hilfiger, which saw distribution grow by double-digits. In H1 2024, sales in North America totalled €217.6 million, down 5.9 percent at constant exchange rates and 6.0 percent at current exchange rates compared with €231.5 million recorded in H1 2023.

Sales in Europe in Q2 amounted to €113.8 million, up 0.8 percent at constant exchange rates and substantially unchanged, at -0.3 percent, at current exchange rates compared with Q2 2023, with the Group attributing positive sales trends to the French market, led by a solid prescription frames business, and the growth of Central and Eastern European markets. In Germany, both the internet pure player (IPP) channel and sales at some major optical chains recorded positive performance. In H1 2024, sales in Europe totaled €239.1 million, up 3.4 percent at constant exchange rates and 1.4 percent at current exchange rates compared with €235.7 million recorded in H1 2023.

In Q2 2024, sales in Asia Pacific amounted to €14.5 million, down 11.3 percent at constant exchange rates and 12.1 percent at current exchange rates, and in H1 2024, sales in Asia Pacific totaled €26.4 million, down 5.6 percent at constant exchange rates and 7.5 percent at current exchange rates compared with €28.6 million recorded in H1 2023.

Finally, sales in the Rest of the World in Q2 2024 amounted to €23.3 million, down 9.6 percent at constant exchange rates and 8.9 percent at current exchange rates compared with Q2 2023. In H1 2024, sales in the Rest of the World totaled €48.8 million, down 11.3 percent at constant exchange rates and 10.2 percent at current exchange rates compared with €54.4 million recorded in H1 2023.

In Q2 2024, Safilo made further progress in margins expansion, continuing to post an improvement both at the industrial and operating level, the Group reported. In that quarter, the Group reported that gross profit amounted to €153.0 million, slightly declining, by 1.5 percent, compared with the adjusted gross profit recorded in Q2 2023, while gross margin improved by 100 basis points, to 60.1 percent of sales from the adjusted level of 59.1 percent recorded in Q2 2023. Selling and marketing, general and administrative expenses decreased by around 2 percent compared with Q2 2023, while their incidence on sales moderately increased due to an unfavorable operating leverage. Finally, adjusted EBITDA amounted to €25.6 million, up 2.9 percent compared with Q2 2023, while the adjusted EBITDA margin improved by 60 basis points, to 10.1 percent from 9.5 percent recorded in Q2 2023.

In H1 2024, Safilo reported delivering a solid set of economic results, bringing gross margin to its new high and delivering a good improvement of the adjusted operating performance. Gross profit for the period amounted to €319.2 million, slightly declining by 1.4 percent, compared with the adjusted gross profit recorded in H1 2023, while the gross margin improved by 120 basis points, reaching 60.0 percent from the adjusted level of 58.8 percent in H1 2023. Selling and marketing, general and administrative expenses declined by around 2.5 percent compared with H1 2023, while their incidence on sales increased.

The adjusted EBITDA amounted to €57.6 million, up 0.5 percent compared with H1 2023, while the adjusted EBITDA margin improved by 40 basis points, to 10.8 percent of sales from 10.4 percent recorded in H1 2023. The adjusted operating result amounted to €37.6 million, up 7.2 percent compared with H1 2023, while the adjusted operating margin improved by 70 basis points, to 7.1 percent of sales from 6.4 percent recorded in H1 2023.

Finally, the Group's adjusted net result equaled €24.2 million compared with €6.9 million recorded in H1 2023, a result that was affected last year by a charge of €8.6 million, due to the revaluation of the liability for options on the interest in Blenders, Safilo stated. In H1 2024, net financial charges decreased to €6.9 million from €9.4 million in H1 2023, mainly due to a lower average Group net debt.