Salvatore Ferragamo S.p.A. (SFER) AI Stock Analysis

• Market Cap: €827.06M
• Dividend Yield: 2.04%
• Average Volume (3M): 358.57K
• Price to Earnings (P/E): 112.5
• Beta (1Y): 1.11
• Revenue Growth: -10.48%
• EPS Growth: -360.89%
• Country: IT
• Employees: 3,329
• Sector: Consumer Cyclical
• Sector Strength: 56
• Industry: Luxury Goods
• EPS (TTM): <0.01
• Shares Outstanding: 168,790,000
• 10 Day Avg. Volume: 392,036
• 30 Day Avg. Volume: 358,566
• PEG Ratio: -3.70
• Price to Book (P/B): 3.65
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 12.98
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €5.45
• Price Target Upside: 9.22% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 7

• Rating: 45 Neutral
• Price Target: €5.00 ▲(0.20%Upside)

Salvatore Ferragamo's stock is facing significant challenges primarily due to poor financial performance and unattractive valuation. The technical analysis also indicates a bearish trend. The combination of negative profitability and declining stock momentum results in a low overall stock score.

Positive Factors

North America Performance

North America recorded positive organic growth in 4Q24 (+6% organic vs consensus -4%) beating consensus estimates by over 10% thanks to strong trends in the primary DTC channel.

Retail Growth

Retail organic growth accelerated sequentially from -6% in 3Q24 to +1% in 4Q24, thanks to positive double-digit performance of handbags and the positive trends of shoes.

Stock Valuation

The stock currently trades at 1.4x FY25E EV/sales, below its past 10-year average of 2.5x.

Negative Factors

APAC Performance

APAC came softer than expected (-25% in Q4 vs -21% in Q3 and consensus -16%) due to weak trends both in DTC and wholesale.

US Tariff Uncertainty

Uncertainty surrounding U.S. tariffs and their possible detrimental impact on consumer confidence across the U.S., Europe, and China, weighs on Ferragamo's 2025 outlook.

Wholesale Weakness

The wholesale weakened further in 4Q24 to -19% at c.FX from -13% in 3Q24, in contrast with management commentary in October.

Salvatore Ferragamo S.p.A. Business Overview & Revenue Model

Company Description

Salvatore Ferragamo S.p.A. (SFER) is a renowned Italian luxury goods company, known for its high-quality craftsmanship and innovative designs. Established in 1927, the company specializes in the creation, production, and distribution of footwear, leather goods, apparel, silk products, and other accessories for men and women. Operating globally, Ferragamo maintains a strong presence in the fashion industry through its retail and wholesale channels, offering a diverse range of products that blend traditional Italian elegance with modern style.

How the Company Makes Money

Salvatore Ferragamo S.p.A. generates revenue primarily through the sale of its luxury products, which include footwear, leather goods, apparel, and accessories. The company's revenue model is based on a combination of retail and wholesale distribution channels. Retail sales are conducted through a network of directly operated stores (DOS) in key locations worldwide, which provide an immersive brand experience and cater to high-end clientele. Additionally, Ferragamo leverages wholesale partnerships with select department stores and specialized retailers to expand its market reach. The company also benefits from its e-commerce platform, which allows it to tap into the growing online luxury market. Key factors contributing to its earnings include brand prestige, product innovation, strategic global expansion, and an emphasis on maintaining high-quality standards in its offerings.

Salvatore Ferragamo S.p.A. Financial Statement Overview

Summary

Salvatore Ferragamo S.p.A. is experiencing financial difficulties, evidenced by declining revenues and profitability. The company faces challenges in maintaining operational efficiency, with negative EBIT and net income in 2024. While leverage is manageable, equity has weakened. Positive cash flow provides some buffer against earnings decline, but profitability and operational challenges need addressing.

Income Statement

Salvatore Ferragamo S.p.A. has faced declining revenues and profitability over recent years. The 2024 annual report shows a negative EBIT and net income, indicating operational challenges. Gross profit margin remains relatively stable but at lower levels compared to prior years. Revenue growth has been negative, and the net profit margin has suffered significantly due to losses.

Balance Sheet

The company's balance sheet indicates a moderate debt-to-equity ratio, suggesting a reasonable level of leverage. However, the equity ratio has declined, reflecting reduced financial stability. Return on equity has turned negative in 2024 due to net losses, highlighting profitability issues.

Cash Flow

Although Salvatore Ferragamo has faced operational challenges, it maintains positive operating cash flow, indicating some stability in its cash-generating capabilities. Free cash flow growth has been inconsistent, but there is a positive free cash flow in 2024, which is a positive sign amidst the earnings decline.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.04B	1.16B	1.25B	1.14B	915.83M
Gross Profit	740.01M	839.43M	901.12M	780.94M	565.54M
EBITDA	130.50M	241.85M	287.84M	299.03M	122.08M
Net Income	-68.09M	26.06M	69.61M	78.65M	-71.70M
Balance Sheet
Total Assets	1.70B	1.81B	1.72B	1.85B	1.71B
Cash, Cash Equivalents and Short-Term Investments	238.19M	304.26M	401.35M	511.80M	328.16M
Total Debt	789.64M	791.17M	604.59M	736.36M	753.91M
Total Liabilities	1.08B	1.09B	944.88M	1.06B	1.00B
Stockholders Equity	619.09M	721.17M	751.81M	764.31M	693.58M
Cash Flow
Free Cash Flow	99.89M	45.76M	211.21M	331.64M	58.52M
Operating Cash Flow	170.62M	117.50M	267.07M	376.13M	88.33M
Investing Cash Flow	-85.85M	-96.97M	-65.86M	-30.89M	-37.39M
Financing Cash Flow	-111.91M	-150.09M	-323.28M	-160.29M	47.26M

Salvatore Ferragamo S.p.A. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.99
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:SFER, the sentiment is Negative. The current price of 4.99 is below the 20-day moving average (MA) of 5.24, below the 50-day MA of 5.48, and below the 200-day MA of 6.33, indicating a bearish trend. The MACD of -0.19 indicates Positive momentum. The RSI at 37.66 is Neutral, neither overbought nor oversold. The STOCH value of 21.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IT:SFER.

Salvatore Ferragamo S.p.A. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PIRC	74 Outperform	€5.95B	12.06	8.52%	4.32%	2.87%	6.90%
BC	67 Neutral	€6.99B	58.53	25.65%	0.81%	12.21%	4.24%
Sector *	66 Neutral	€9.18B	14.50	5.85%	3.08%	3.86%	-31.71%
MONC	64 Neutral	€12.95B	20.23	18.81%	2.40%	4.18%	4.35%
SFER	45 Neutral	€827.06M	112.46	-10.16%	2.04%	-10.48%	-360.89%