Safilo's Net Profit, Sales Rise in the H1, Helped by Asia-Pacific and Tariff Offsetting Measures
Revenues in the six-month period ended June 30 rose 2.3 percent to 537.6 million euros from 532 million euros in the same period of 2024, helped by performance in Asia-Pacific. Adjusted net profit rose to 33.7 million euros compared to 24.2 million euros recorded in the first half of last year.
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'In all our regions, momentum continued to be strong for our contemporary and lifestyle brands, with Carrera, David Beckham, Tommy Hilfiger, Boss, Carolina Herrera and Marc Jacobs standing out also in the second quarter,' Trocchia said adding that North America performance was helped by sport and prescription eyewear.
In the first half, Safilo's gross margin rose to 61.1 percent from 60 percent in the same period of 2024. Adjusted earnings before interest, taxes, depreciation and amortization margin rose to 11.6 percent from 10.8 percent a year earlier.
Despite the improvement in its margins and bottom line, sales momentum in the first-quarter worldwide slowed in the second quarter. Overall, sales amounted to 251.9 million euros versus 254.8 million euros, compared to the same period of 2024. The North American market, its second largest by sales, was down 1.1 percent to 102.1 million euros, impacted by the weakening of the U.S. dollar against the euro, which dampened an otherwise positive performance.
The rest of the world category plunged 14.9 percent to 19.8 million euros, but the Asia-Pacific market offset losses, surging 8.2 percent in the same period to 15.7 million euros. The European market, its top market by sales, inched up 0.4 percent to 114.2 million euros, driven by revenue in France in the second quarter. Sales performance in Europe was also marginally impacted by the disposal of the subsidiary Lenti Srl in June.
In the first half, U.S. President Donald Trump's tariffs and trade policies spurred the acceleration of Safilo's supply chain diversification, and selective price adjustments in the U.S. In May, the firm said it also continued to source from South East Asia to reduce the company's reliance on China with the goal to bring China-sourced production below 40 percent within the next 12 months. Additionally, the firm said it was evaluating an expansion of its U.S. manufacturing footprint with a potential increase in capacity at its facility in Utah.
During the conference at the end of trading in Milan, Trocchia expressed confidence in the potential of its renewal of Carolina Herrera license for the next five years and its recent share buyback program. As of June 30, Safilo had purchased around 438,000 Safilo Group ordinary shares, equal to about 0.11 percent of the outstanding shares. He was also positive on the addition of Victoria Beckham to its portfolio, further enhancing its women's offering and strengthening its positioning in the aspirational, entry-to-luxury segment.
In response to further mitigation measures in response to tariffs, Trocchia said further measures weren't necessary.
'We don't see the need to do other activities or take further actions on price increases. We've been very careful in executing this as it stands today. That's it. We don't see a need for further action on pricing,' he said.
In the first half of 2025, cash flow from operating activities reached 40.7 million euros, marking a significant increase compared to 27.3 million euros in the same period of 2024. This improvement was helped by tight control over stock levels supported by the group's strategic decision in the second quarter to limit imports from China.
For the rest of 2025, Trocchia said that the priority remains the North American and European markets and said the company is mulling new opportunities, especially in Asia and within optical, sport and women categories. 'M&A is a priority…if at a certain point we come to the conclusion that there is no M&A at the price or multiple that is right, then we can do [execute] different capital allocations. Let's see what will happen in the second quarter on the M&A side,' he said.
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