Safilo Group S.p.A. reported first-quarter gross profit reached €127.5 million, up 9.1 percent compared to €116.8 million in the first quarter of 2017.
Excluding €1.7 million of non-recurring costs, adjusted EBITDA was €13.1 million (5.2 percent of net sales) compared to a loss of €6.2 million (-2.7 percent of net sales) in Q1 2017.
Sales of €250.9 million increased 6.9 percent at current exchange rates and 15.4 percent at constant exchange rates from €234.6 million the same quarter a year ago.
The brand portfolio, up 16.9 percent at constant exchange rates, excluding Gucci business, was bolstered by the launch of new licenses, Moschino, Love Moschino and rag & bone.
Gross margin increased to 50.8 percent of net sales, up slightly from 49.8 percent in Q1 2017. Safilo’s net debt stood at €166 million, compared to €131.6 million at the end of December 2017.
First Quarter Highlights
Total net sales in Europe were €123.5 million, up 25.5 percent at current exchange rates and 26.8 percent at constant exchange rates compared to €98.5 million in Q1 2017. The brand portfolio, excluding Gucci business, increased by 31.1 percent at constant exchange rates, recording significant growth rates in the majority of the markets that had been meaningfully impacted in Q1 2017 by the difficult startup of the new information system in the Padua, Italy, distribution center.
Sales in North America were €94.8 million compared to €114.5 million in Q1 2017, down 17.2 percent at current exchange rates due to the sharp depreciation of the dollar against the euro. At constant exchange rates, the wholesale revenues decreased by 5.5 percent, mainly reflecting the persistence of a weak and changing business environment in department stores. In the quarter, Solstice sales were €11.8 million, posting an increase of 1.4 percent at constant exchange rates, while same store sales performance was positive by 2.5 percent. The group closed 16 Solstice stores in the period, taking the network to a total of 86 stores at the end of March, compared to 105 stores at the end of March 2017.
Sales in Asia-Pacific were €14.3 million, up 29.3 percent at current exchange rates and 44.3 percent at constant exchange rates compared to the difficult start to the year posted in Q1 2017. After the progressive sales recovery recorded during the second half of 2017, the improvement in the first three months of 2018 was significant for the majority of the brands, key markets and channels of the region.
Sales in the rest of the world were €18.2 million, up 72.1 percent at current exchange rates and 95.2 percent at constant exchange rates, almost doubling the business recorded in Q1 2017. In the period, Brazil, Mexico, India and Saudi Arabia represented the most dynamic markets, together with the countries where Safilo had more recently entered through local distribution partnerships.
Safilo’s portfolio encompasses Carrera, Polaroid, Smith, Safilo, Oxydo, Dior, Dior Homme, Fendi, Banana Republic, Bobbi Brown, BOSS, BOSS Orange, Elie Saab, Fossil, Givenchy, havaianas, Jack Spade, Jimmy Choo, Juicy Couture, Kate Spade New York, Liz Claiborne, Love Moschino, Marc Jacobs, Max Mara, Max&Co., Moschino, Pierre Cardin, rag&bone, Saks Fifth Avenue, Swatch and Tommy Hilfiger.
