Release Date: March 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Safilo Group SpA (STU:S5U5, Financial) demonstrated resilience and flexibility in navigating economic uncertainties and geopolitical tensions in 2024.
- The company achieved a gross margin improvement, reaching nearly 60% of sales, driven by increased efficiency and effective pricing strategies.
- Safilo Group SpA (STU:S5U5) generated solid cash flow from operating activities, exceeding €70 million, supporting key investments.
- The acquisition of the perpetual license for eyewear by David Baker significantly strengthened the company's home brand portfolio.
- Safilo Group SpA (STU:S5U5) made significant progress in sustainability, with 95% of electricity consumption covered by renewable sources and a 90% reduction in SOP1 and SOP2 emissions.
Negative Points
- Total sales declined by 2.3% at constant exchange rates, impacted by unfavorable market dynamics in North America and the conclusion of a license.
- Polaroid faced challenges due to adverse weather conditions in Europe, affecting early summer sales.
- Blenders experienced a challenging fourth quarter due to tough comparisons with the previous year.
- Smith faced headwinds from lower winter preorders and a soft summer bike business, reflecting broader challenges in the sport and outdoor sector.
- The Asia Pacific region saw a sales decline of 21% at constant exchange rates, despite a strong rebound in Q4.
Q & A Highlights
Q: What is your expectation for the gross margin this year? Do you see room for expansion?
A: Unidentified_3: While we don't provide specific guidance, our aim is to continue improving operational levels and support from operating leverage, aiming to enhance the gross margin further.
Q: Do you expect marketing expenses to increase as a percentage of sales this year?
A: Unidentified_2: This year, we will manage investments tightly due to uncertainty. Our marketing spend is already high, and we aim to optimize investments, focusing on digital flexibility to adjust quickly to market changes.
Q: Can you comment on the entry speed into 2025 in Europe, considering the slowdown experienced in late 2024?
A: Unidentified_2: Europe has been performing well, particularly in France and Central Eastern Europe. Germany shows some softness, but overall, the start of the year in Europe has been positive.
Q: What is the current situation with tariffs, and how are you dealing with them?
A: Unidentified_3: We are monitoring US tariffs on Mexico and China closely. We have diversified our supply chain out of China and are implementing mitigation measures. The impact will depend on how these issues settle.
Q: Is there any chance that the US market turns positive this year, or is it too premature?
A: Unidentified_2: We observed positive signs in Q4 and January, but March will be crucial to determine the trend. The US market shows potential recovery, but uncertainty remains a factor.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
