Moodie Davitt snapshot: Safilo Q1 2018 results
 Net sales up +6.9% year-on-year at current exchange rates
Brand portfolio +16.9%
 Gross profit ahead +9.1% to €127.5 million
– Europe sales +25.5%
– Asia Pacific +29.3% 

Source: The Moodie Davitt Report

Eyewear company Safilo’s Q1 2018 net sales reached €250.9 million, a +6.9% year-on-year increase at current exchange rates and +15.4% at constant exchange rates.

The brand portfolio (excluding Gucci, now repatriated to Kering), was up +16.9% at constant exchange rates, enriched by the launch of new Moschino, Love Moschino and rag & bone licences.

Gross profit for the quarter rose +9.1% to €127.5 million.

Excluding €1.7 million of non-recurring costs, adjusted EBITDA was equal to a profit of €13.1 million (5.2% of net sales) compared to a €6.2 million loss (-2.7% of net sales) in Q1 2017.

The company commented: “Safilo closed the first quarter of the year with a significant recovery compared to the same period of 2017 and a return to normal operating conditions, recording strong growth rates in the European markets and in the emerging countries which had been meaningfully impacted last year by the difficult start-up of the new information system in the Padua distribution centre.

“Excluding the impact from the weaker US Dollar, sales in North America remained soft, in particular due to the still difficult business environment in department stores.”

Regional breakdown

Europe

Total net sales in Europe equalled €123.5 million, a +25.5% rise at current exchange rates and +26.8% at constant exchange rates.

The brand portfolio, excluding Gucci business, increased by +31.1% at constant exchange rates. According to Safilo, the portfolio recorded significant growth rates in the majority of the markets which had been meaningfully impacted in Q1 2017 by the difficult start-up of the new information system in the Padua distribution centre.

North America

Sales in North America decreased -17.2% at current exchange rates to €94.8 million due to the sharp depreciation of the Dollar against the Euro. At constant exchange rates, wholesale revenues decreased by -5.5%, mainly reflecting the persistence of a weak and changing business environment in department stores, said Safilo.

In the quarter Solstice sales increased +1.4% at constant exchange rates, while same store sales increased by 2.5%. The group closed 16 Solstice stores in the period, taking the network to a total of 86 stores at the end of March 2018, compared to 105 stores at the end of March 2017.

Asia Pacific

Sales in Asia Pacific (€14.3 million) were up +29.3% at current exchange rates and +44.3% at constant exchange rates.

“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,” noted Safilo.