Safilo Shares Soar After Business Update
MILAN — Safilo Group shares shot up 15.2 percent to 0.64 euros on Friday in midmorning trading on the Italian Stock Exchange following its business update in relation to the COVID-19 pandemic and closed up 18 percent at 0.66 euros at the end of the day.
“Based on the business rebound recorded in July, its performance in August and preliminary data for the month of September — the group’s management expects total net sales (including acquisitions) for third-quarter 2020 to grow by midsingle digits at constant exchange compared to the same quarter of the previous year. The positive trend in total sales supports the forecast for the quarter to return to a profit at the adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] level,” the Italian eyewear giant stated.
The company attributed the recovery to an improved trend in sales, compared to the previous estimate of a moderate decline, and a more contained slowdown in the wholesale business. It cited a continued recovery in the North American independent opticians’ market. Safilo also pointed to the strong progress of Smith’s online business, as well as a greater-than-expected contribution deriving from the group’s direct-to-consumer business, in particular for the recently acquired brands Blenders and Privé Revaux.
In addition to its own brands Carrera, Polaroid, Smith and Safilo, the group produces and distributes eyewear for labels ranging from DB Eyewear by David Beckham, Missoni, Marc Jacobs and Moschino to Tommy Hilfiger, Under Armour and Levi’s. Safilo expects the exit of the Dior brand beginning Jan. 1, 2021, and the Fendi label beginning July 1 that same year.
The company once again did not provide a new guidance for 2020, in light of the ongoing “strong uncertainties” related to the pandemic, intensified by growing concerns about a possible second wave of infections.
“In any case, the group remains committed to providing timely information to the market and to all stakeholders on the developments that the health emergency may have in the coming months on the group’s economic and financial results,” it said.
As reported, the disruption caused by the COVID-19 pandemic in the months of April and May dragged down Safilo Group’s bottom line and revenues in the first half, but it reported a recovery in June, more significant in Europe, and a sales rebound in July.
Excluding non-recurring costs, Safilo in the six months ended June 30 registered an adjusted net loss of 63.7 million euros, compared with an adjusted net profit of 8.5 million euros recorded in the same period last year.
Revenues fell 32.3 percent to 335.6 million euros compared with 495.9 million euros in the first half of 2019.
In the second quarter, revenues tumbled 54 percent to 114.5 million euros.
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