Italian eyewear maker Safilo Group S.p.A. reported a 20% decline in its adjusted core profit for the first half of 2023, as sluggish demand in Europe and North America weighed on its performance..
**Financial Results:**.
* Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) fell by 20.2% to 77.2 million euros ($82.4 million) in the January-June period, from 96.8 million euros in the same period last year..
* Net revenues declined by 3.3% to 502.9 million euros from 521.1 million euros in the previous year’s first half..
* Safilo reported a net loss of 2.1 million euros in the first half of 2023 compared to a net profit of 5.6 million euros in the first half of 2022, primarily due to higher input costs and unfavorable exchange rate fluctuations..
**Geographical Performance:**.
* Europe, Safilo’s largest market, saw a 6.1% decrease in net revenues, impacted by weak consumer sentiment and ongoing lockdowns in parts of the region..
* North America also experienced a decline with a 1.7% drop in revenue, attributed to competitive market conditions and cautious consumer spending..
* Asia, on the other hand, showed resilience with a 12.9% increase in revenue, driven by strong demand in China and other emerging markets..
**Product Categories:**.
* Prescription eyewear, Safilo’s core business, faced challenges due to the overall slowdown in the optical market, resulting in a 3.9% decline in revenue..
* Sunglasses, which contributed over 40% of the group’s total revenue, performed better, growing by 1.4%, primarily driven by the success of licensed brands such as Gucci, Fendi, and Jimmy Choo..
**Outlook:**.
* Safilo acknowledged the challenging market conditions in Europe and North America, but expressed confidence in its long-term growth prospects..
* The company plans to focus on expanding its presence in emerging markets, investing in digital transformation, and launching new product lines to drive future growth..
Overall, Safilo’s financial results for the first half of 2023 were impacted by the headwinds in Europe and North America. However, the company’s resilience in Asia and its plans for future growth indicate its commitment to overcoming these challenges and maintaining its position in the global eyewear industry..
