Ferragamo slumps after Q1 earnings, analysts are sceptical

(Il Sole 24 Ore Radiocor) - Salvatore Ferragamo slumped in the Italian stock market in the aftermath of the release of first-quarter 2026 sales figures, despite the fact that they were pretty much in line with expectations. The stock plunged more than 15%.

On the eve of market close, the Florentine company announced that sales for the January-March period were €209 million, down 5.5% at current exchange rates and 1.2% at constant exchange rates compared to Q1 2025. Direct-to-consumer sales, i.e. sales in company-owned shops and online, continued to grow organically: they increased by 5.5% at constant exchange rates (-1.9% at current exchange rates) to EUR 160.67 million, driven by double-digit growth in North America and Latin America and positive results in Europe and Asia Pacific, with only the Japanese market declining. On the other hand, the wholesale channel fared poorly, reporting net sales down 19% at constant exchange rates (-21.8% at current exchange rates) to EUR 42.16 million. The latter numbers were worse than expected and were impacted by management's revision of the distribution network, as well as a high comparison base (+10.3% at constant exchange rates in 1Q2025).

Analysts, however, appreciated the signs of brand recovery noted in direct-to-consumer sales. On the other hand, for most experts, these were thenone sufficient to guarantee certainty on the relaunch path, especially considering the difficult context for luxury that looms in the coming months. Equita has therefore decided to confirm its 'Hold' recommendation on Ferragamo, while cutting its price target by 5% to €7.3. The sim pointed out that the Dtc sales performance for the first three months of 2026, while going well, did not show 'sequential acceleration'.

Moreover, during the conference call, board member Ernesto Greco expressed doubts about the recovery in China, an important market for the group. "We confirm the Hold considering the high valuations, waiting for more visibility on the sustainability of growth, and taking into account margins and cash generation below industry standards even in three years' time," concluded Equita's experts, who also cut 2026 revenue estimates by 1% (from +3.6% organic to +2%) and ebit 2026 estimates by 12% (from €51 million to €45 million).

Barclays was even more critical: the British bank issued an 'Underweight' on Ferragamo, with a price target of EUR 5.5, remaining 'sskeptical about the brand's ability to recover quickly'. The experts pointed their index finger 'at the negative tone on China', conveyed in the conference call. Bernstein's experts, on the other hand, took a different view, raising the price target on Ferragamo from EUR 7.5 to EUR 8.8, maintaining the recommendation of 'Outperform'. The analysts particularly appreciated the Dtc sales performance and thus described themselves as 'confident in the slow and steady improvement shown in the current set of results'. They cautioned, however, that the shares have already rallied in the last period, boasting an advance of about 10 per cent in one month.