Safilo Group reported a drop in adjusted core profit in 2022, attributed to underperformance in its North American and European markets, amidst geopolitical tensions and ongoing economic uncertainties.
**Key Highlights:**
* Adjusted core profit fell 20%, weighing in at u20ac154.5 million (US$166.6 million) compared to u20ac192.9 million in 2021.
* Net revenues remained relatively stable at u20ac1.03 billion (US$1.1 billion), with a slight 1.1% drop, as gains in Latin America and Asia mitigated the weakness in other regions.
* Safilo’s retail channel performed well, contributing u20ac316.6 million (US$341.7 million) to group revenue and experiencing 15.7% growth.
* Wholesale revenues, accounting for the majority of Safilo’s business, dipped by 5.3% to u20ac666.8 million (US$719.2 million).
* Safilo continued to strengthen its brand portfolio, extending licensing agreements with Elie Saab and Givenchy.
* The group faced headwinds due to the conflict in Ukraine, China lockdowns, energy crisis, and inflationary pressures.
**Regional Performance:**
* Europe, accounting for 57% of revenue, witnessed a 10.4% decline to u20ac591 million (US$636.7 million).
* North America, representing 23% of revenue, experienced a 13.5% drop to u20ac236 million (US$254.5 million).
* Asia, excluding China, showed resilience with a 2.8% growth to u20ac160 million (US$171.7 million).
* Latin America posted strong growth of 27.8%, contributing u20ac43 million (US$46.3 million) to revenue.
**Outlook:**
* Safilo aims to regain profitability in 2023 and is focused on strategic initiatives, including expanding digital capabilities, leveraging data analytics, and optimizing its supply chain.
* The group expects a challenging first half of 2023 due to ongoing macroeconomic uncertainties.
**Analysis:**
Safilo’s performance reflects the broader challenges impacting the luxury sector, particularly the subdued demand in key markets and ongoing supply chain disruptions. The group is taking steps to address these headwinds, emphasizing its retail channel and expanding its geographic reach. However, the recovery path may be gradual given the volatile global economic landscape..
