Aeffe sees earnings plummet in first half of 2019
Aeffe's progress has taken a hit in the first half of 2019. Suffering from a complicated economic climate, the Italian fashion group's sales slipped 2.4% in its wholesale channel, decreasing across all geographic regions except Asia. Only the company's Moschino label proved to be a bright spot, with other brands, such as Alberta Ferretti, Philosophy and Pollini, posting declines. All this means that in the six-month period ended June 30, 2019, the group's revenue has remained stable, rising 1.3% (1% in constant currencies) to 173.3 million euros.
As Aeffe Executive Chairman Massimo Ferretti points out in a release, "Encouraged by the good performance of our monobrand stores, the results approved today are influenced by the slowdown in the wholesale channel recorded in the second quarter, penalized by an uncertain macroeconomic situation with consequent impact on margins."
Indeed, the key metrics of the group, which also produces the Jeremy Scott and Cédric Charlier collections via licensing agreements, were in decline during the period, with the company also blaming increased production, marketing and R&D costs. Expenses related to improving its positioning and ensuring visibility also rose, as well as those linked to the necessary resources for developing the group's e-commerce capabilities.
Aeffe's net earnings therefore fell 37%, down from 8.3 million euros at the end of June 2018, to 5.2 million euros a year later, and that's without taking into account the effects resulting from the company's first ever use of IFRS 16. Applying this international accounting standard, the group's net earnings totaled 5.2 million euros.
EBITDA rose to 26.7 million euros, but only hit 18.3 million if the effects of IFRS 16 aren't taken into account. This reflects a 27.2% increase when compared to the first half of 2018, but a decrease of 12.8% without the application of the new accounting standard.
The San Giovanni in Marignano-based group's ready-to-wear division is still its biggest earner, posting stable revenues of 132.2 million euros and accounting for 69% of total sales, while the accessories division saw a 4.4% increase in constant currencies.
With 130.1 million euros in sales (up 6.1% from the first half of 2018), Moschino is still the main driving force behind Aeffe's portfolio, responsible for 75% of total revenues, compared to 71% in the same period in the previous year. The group's other brands, including Alberta Ferretti, youth line Philosophy by Lorenzo Serafini and Pollini footwear, as well as the company's licensing activities, all saw a decline in their sales during the first half of the year.
From a geographical point of view, Aeffe's sales only made progress in its "Asia and rest of world" region (excluding Europe and America), where revenues increased 14.8% to 45.5 million euros.
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