Ferragamo's 9M sales down 6.6%; Asia drags, margin risk prompts reset
Bottom Line Impact
Absent swift SKU and cost resets, revenue will likely remain flat to down low single digits with 100-200 bps margin pressure, risking share loss in core leather goods; decisive focus on icons and DTC productivity can stabilize growth and protect brand equity within 2-3 quarters.
Key Facts
5- 9M sales €695m vs €744m prior year, down 6.6% at current rates
- Q3 sales up 1.7% at constant FX; Q3 direct-to-consumer €169m, down 0.7% YoY
- 9M own stores €526m, down 4.7% YoY; wholesale €40m in Q3, down 8% YoY
- Regional 9M performance: APAC down 17.9%, EMEA down 4.1%, North America down 0.4%, LatAm down 2.6%
- Channel mix shifting toward direct as wholesale remains the weakest channel
Time Horizons
Executive Summary
Nine-month sales fell 6.6% to €695m as Asia Pacific declined 17.9% and wholesale underperformed, pressuring near-term margins. A modest Q3 uptick at constant FX and a higher average ticket suggest brand pricing power, but a decisive shift to core footwear and leather goods and cost discipline is required to stabilize performance within 2-3 quarters.
Actionable Insights
Immediate Actions (Next 30-90 days)
Commit to a portfolio simplification program cutting 20-30% of SKUs in non-core ready-to-wear and fringe accessories by SS25, reallocating capacity to top 50 SKUs in footwear and leather goods.
Rationale: SKU rationalization can improve gross margin by 80-120 bps and raise full-price sell-through by 5-8 pts while reducing working capital tied up in long-tail inventory.
Role affected:CEO
Urgency level:immediate
Shift 15-20% of brand and performance marketing spend from APAC to Americas and EMEA, anchoring campaigns on signature leather and shoe icons; deploy targeted clienteling to top 10% of DTC clients.
Rationale: Rebalancing spend toward resilient regions can lift DTC traffic 3-5% and conversion 50-100 bps, protecting full-price mix during Asia softness.
Role affected:CMO
Urgency level:immediate
Short-term Actions (6-12 months)
Execute a €25-35m cost takeout over 12 months by optimizing store labor, renegotiating leases in underperforming APAC locations, and consolidating wholesale doors by 10-15% in the region.
Rationale: A 3-4% OPEX reduction could add 120-180 bps to EBIT margin and neutralize mix pressure from Asia while preserving investment capacity in Americas and EMEA.
Role affected:CFO
Urgency level:short-term
Reduce weeks-of-supply by 2-3 weeks in APAC via controlled buys and outlet liquidation caps; implement nearshoring for replenishment SKUs to cut lead times by 20-30%.
Rationale: Lower WOS and faster replenishment decrease markdown risk by 100-150 bps and align inventory with volatile demand.
Role affected:COO
Urgency level:short-term
Risks & Opportunities
Primary Risks
- Prolonged APAC demand slump leading to further negative mix and markdowns
- Channel conflict from wholesale cuts impacting short-term sell-in and brand reach
- FX volatility eroding reported growth despite constant currency improvements
Primary Opportunities
- Elevating core footwear and leather goods to regain pricing power and mix
- Americas and EMEA resilience enabling DTC-led growth with higher gross margins
- Assortment and OPEX reset to structurally improve EBIT margin by 100-200 bps