Company Reports

Ferragamo reported sequential acceleration in sales growth to almost 5% in the quarter, from negative 1% earlier, both figures at constant currencies. Gross and operating profit margins improved. Shares traded down 7% in early trading on Aug. 4.

Ferragamo reported a 1.2% decline in constant-currency sales in the quarter, driven by a 19% drop in wholesale sales not fully offset by 5.5% growth in direct-to-consumer channels. Shares were down 15%.

Ferragamo's revenue was down 3.8% in 2025, but up 0.4% in direct-to-consumer channels. Operating costs were well contained, and the company returned to profitability before write-downs and impairments. Markets reacted positively, sending shares 7% higher.

Luxury sector shares were down by 1%-7% on March 2 following the US and Israeli attacks on Iran and Iran's retaliatory attacks on Israel and US bases across the Middle East (United Arab Emirates, Saudi Arabia, Qatar, Kuwait, and Bahrain).

Salvatore Ferragamo is an Italian monobrand company mainly known for its footwear and accessories. We believe the firm benefits from relatively strong control over distribution (over 70% of revenue is retail), while its strong representation in airports positions it well to benefit from growth in global travel flows and tourist luxury spending.

Ferragamo saw sales growth of 1.7% in the third quarter of 2025, a major improvement from the 11.8% decline posted in the previous quarter. The results exceeded industry expectations, sending the stock up 12% at the market opening on Oct. 24.

Salvatore Ferragamo reported a 1% decline in first-quarter 2025 revenue, a sequential improvement from its 4% decline in the prior quarter, and a better showing than many bigger industry players. Markets are not impressed though, sending shares over 4% lower.

Salvatore Ferragamo is an Italian monobrand company mainly known for its footwear and accessories. We believe the firm benefits from relatively strong control over distribution (over 70% of revenue is retail), while its strong representation in airports positions it well to benefit from growth in global travel flows and tourist luxury spending.

We are maintaining our fair value estimates for stocks in our luxury coverage following the announcement of reciprocal tariffs by US President Donald Trump. Tariffs of 20% on the European Union, 10% on the UK, and 31% on imports from Switzerland are having the most impact on our coverage (as well as 36% tariffs on Thailand for Pandora, where most of its manufacturing takes place). Americans account for around 30% of global luxury consumption and sales exposures in the Americas for companies under our coverage range from the midteens to high 30s. Moncler, Prada, and Swatch are least exposed; EssilorLuxottica, Brunello Cucinelli, and Pandora are most exposed.

We are maintaining our fair value estimate for no-moat Salvatore Ferragamo as the company reported weak sales and profits, as expected, for 2024.

We are reducing our fair value estimate for no-moat Salvatore Ferragamo to EUR 7.10 from EUR 9.60 to factor in weaker performance in 2024 due to industrywide headwinds as well as a lower possibility of Ferragamo recovering strongly from this downturn given a lack of scale compared with its big peers and lower ability to invest in marketing and growth of the brand. We believe shares are fairly valued at current levels.

Salvatore Ferragamo is an Italian monobrand company mainly known for its footwear and accessories. We believe the firm benefits from relatively strong control over distribution (over 70% of revenue is retail), while its strong representation in airport locations (about 150 travel retail stores) positions it well to benefit from growth in global travel flows and tourist luxury spending.

We are reducing our fair value estimate for no-moat Ferragamo to EUR 9.60 from EUR 10.60 to incorporate near-term pressure on revenue and margin driven by the luxury industry downturn, exacerbated by Ferragamo’s weaker position and lack of scale compared with peers. Ferragamo also underperformed the sector in prior downturns during 2009 and 2020. Still, we believe that shares look somewhat undervalued at current levels.

Salvatore Ferragamo is an Italian monobrand company mainly known for its footwear and accessories. We believe the firm benefits from relatively strong control over distribution (over 70% of revenue is retail), while its strong representation in airport locations (about 150 travel retail stores) positions it well to benefit from growth in global travel flows and tourist luxury spending.

We are maintaining our fair value estimate for no-moat Ferragamo as the company reported weak first-quarter revenue, on the lower end of peers. Continuing weakness suggests that as a smaller player, Ferragamo is harder hit by the industry slowdown, and the appointment of Maximilian Davis’ collections have so far failed to improve brand appeal two years into his appointment.

We are reducing our fair value estimate for no-moat Salvatore Ferragamo to EUR 10.60 per share from EUR 13.60 as we incorporate weak 2023 results and a more cautious stance on future sales and earnings development into our models. We now believe it will be increasingly expensive and difficult to put the brand back on a growth path, given its lack of scale, only minor market share in the highly competitive leather goods and footwear segment, and modest resources compared with the big luxury groups. A succession of management and creative talent over the past five years has not been able to improve the brand’s fortunes; revenue and margins are lower than 2019 levels, despite the industry’s strong post-covid recovery. Hence, we are seeing a substantial turnaround as increasingly unlikely. We now model long-term revenue growth of just under 4% (a bit below the industry’s mid-single-digit growth) and operating margin in the low to mid-teens (it was increasing to high teens in our prior forecast). We believe the cost base should still benefit from store base rationalization and some leverage on modestly growing revenue. We believe the shares are fairly valued.

Salvatore Ferragamo is an Italian monobrand company mainly known for its footwear and accessories. We believe the firm benefits from relatively strong control over distribution (over 70% of revenue is retail), while its strong representation in airport locations (about 150 travel retail stores) positions it well to benefit from growth in global travel flows and tourist luxury spending.

We are reducing our fair value estimate for no-moat Ferragamo to EUR 13.60 as we lower our expectations for 2023 sales and margins. First-half results were rather weak, with revenue declines across most geographies with the exception of the Europe, Middle East, and Africa region, in contrast to generally solid revenue trends and resilient margins reported by most luxury peers. Sales in North America were particularly weak (in line with industry trends, but on the weaker side of peers) with an 18.6% constant-currency decline in the first half, which was partly company-driven with wholesale network rationalization. This compares with a 23.4% decline in this market in the first quarter. EMEA recorded positive growth at 10.9% in the first half. However, it decelerated significantly versus the first quarter (25% growth). Surprisingly, and in contrast to peers, sales in the Asia-Pacific were in negative territory too, down 10.4% in the first half, despite a recovery in China. Most luxury peers recorded strong double-digit growth in this market. Management attributed the weakness to sluggish performance in South Korea (also noted by some peers) and the travel retail channel, even as sales in greater China were in positive territory (albeit slowing down in the past few weeks). Travel retail channel weakness came as a surprise given the 168.3% growth in the Asia-Pacific region in the first half for Dufry, a travel retail operator, and a generally low comparison basis.

Salvatore Ferragamo is an Italian monobrand company mainly known for its footwear and accessories. We believe the firm benefits from relatively strong control over distribution (73% of revenue is retail), while its strong representation in airport locations (about 150 travel retail stores) positions it well to benefit from growth in global travel flows and tourist luxury spending.

We are currently maintaining our fair value estimate of EUR 16 for no-moat Ferragamo as we update our model following the release of first-quarter earnings. After a solid recovery seen in the first quarter of 2022 following two years of heavily COVID-19-affected revenue, the first quarter of 2023 saw a decline in total revenue once more by 6.5%. We currently view shares as fairly valued.