DTC growth, margin gains and structural cost reductions restore earnings as European and Asian sales remain under pressure.
Key Takeaways
- North America delivered double-digit growth, while Europe, Japan and Asia Pacific contracted.
- Net profit reached €1.5 million, following a €57.5 million reported loss and a €16.2 million adjusted loss a year earlier.
- DTC sales grew 6.1% at constant exchange rates and increased their share of revenue to 77.7%.
- Adjusted operating profit rose to €20.9 million as gross margin expanded and operating costs declined.
Salvatore Ferragamo returned to profit in the first half of 2026, offering an early measure of progress from its cost restructuring and increasingly selective distribution strategy.
The Florence-based luxury group generated consolidated net profit of €1.5 million for the six months ended June 30, compared with a €57.5 million loss in the prior-year period. The 2025 result included €41.2 million in asset impairments; on an adjusted basis, the earlier loss was €16.2 million.
Revenue declined 1.3% at reported exchange rates to €467.8 million and increased 1.9% at constant currency. Second-quarter trading showed firmer momentum, with revenue rising 2.4% to €258.8 million, equivalent to growth of 4.6% at constant exchange rates.
The channel mix continued to move toward direct retail. DTC revenue increased 1.8% to €363.3 million and advanced 6.1% at constant currency. Its contribution to group revenue reached 77.7%, up from 75.4% a year earlier. Ferragamo operated 349 directly managed stores at the end of June, eight fewer than in the comparable period.
Wholesale revenue fell 11.6% to €93.2 million, with an 11.2% decrease at constant currency. The group linked the contraction to greater distribution selectivity and a focus on strategic accounts aligned with its brand positioning.
Margin expansion and lower expenses supplied the central earnings catalyst. Gross profit rose 0.9% to €323.9 million, lifting gross margin by 150 basis points to 69.2%. Cost of sales declined 6%.
Total operating costs, net of other income, decreased 17% to €303 million. The comparison includes the prior-year impairments; excluding those charges, costs fell 6.4%. Selling and distribution expenses and general and administrative costs recorded the largest reductions.
Operating profit reached €20.9 million, representing a 4.5% margin. The prior-year adjusted result was a €2.9 million operating loss. EBITDA increased 23.5% to €89.6 million, taking the EBITDA margin to 19.2% from 15.3%.
Other income also contributed to the improvement, rising to €12.6 million from €6 million. The figure included a €2.1 million gain from the sale of a U.S. property, along with income from provision releases and the early termination of certain leases.
North America reinforced its position as Ferragamo’s largest market, accounting for 34% of net sales. Revenue in the region grew 9.7% to €155 million and advanced 15.4% at constant currency, with both DTC and wholesale posting double-digit constant-currency gains.
Central and South America increased 11.8% at reported rates and 6.8% at constant currency. Europe declined 9%, or 8.6% at constant currency, as positive DTC performance was outweighed by wholesale weakness. Asia Pacific fell 6.4%, equivalent to a 3% constant-currency decline, with wholesale sales down at a double-digit rate. Japan contracted 13% as reported and 1% at constant currency.
Footwear strengthened its position as the group’s largest product category. Sales rose 2.7% to €207.2 million and increased 5.7% at constant currency, bringing the category to 45.4% of net sales. Leather goods declined 6.6% to €186 million, or 3.1% at constant currency, reducing its contribution to 40.8%. Apparel grew 1.8%, while silk and other products advanced 3.7%.
Cash generation improved alongside earnings. Reported operating cash flow reached €70.6 million, following an €8.6 million outflow in the first half of 2025. After lease repayments, adjusted operating cash generation totaled €7.6 million.
Ferragamo ended June with an adjusted net cash position of €124.5 million, compared with €143.9 million at the end of 2025. Capital expenditure totaled €17.9 million, including €14.6 million directed toward store openings and renovations. Inventories and recovery rights associated with returns declined 10.3% year over year to €277.2 million.
The group characterized the near-term economic environment as highly uncertain, citing geopolitical conflicts, trade tensions and limited macroeconomic visibility. Its stated priorities remain centered on medium- and long-term business development, organizational capabilities and sustainable value creation. The first-half figures show that operational discipline is beginning to rebuild profitability, while the geographic and category results leave a clear growth agenda ahead.
