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

• Market Cap: €928.62M
• Dividend Yield: 1.74%
• Average Volume (3M): 372.55K
• Price to Earnings (P/E): 112.5
• Beta (1Y): 1.12
• Revenue Growth: -10.48%
• EPS Growth: -360.89%
• Country: IT
• Employees: 3,329
• Sector: Consumer Cyclical
• Sector Strength: 70
• Industry: Luxury Goods
• EPS (TTM): <0.01
• Shares Outstanding: 168,790,000
• 10 Day Avg. Volume: 325,516
• 30 Day Avg. Volume: 372,548
• PEG Ratio: 0.11
• Price to Book (P/B): 1.50
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 8.53
• 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: €5.54
• Price Target Upside: 1.47% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 6

• Rating: 47 Neutral
• Price Target: €5.50 ▲(0.73%Upside)

Salvatore Ferragamo S.p.A. faces significant financial challenges, with declining revenues and profitability being the primary concerns. Technical analysis indicates bearish momentum, further weighing down the stock's outlook. Additionally, poor valuation due to negative earnings provides little incentive for investment. Positive cash flow offers some stability, but overall, the stock requires substantial improvements in profitability and operational efficiency to enhance its attractiveness.

Positive Factors

Geographical 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 Performance

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.

Negative Factors

Leadership and Strategy

Ferragamo continues to navigate a prolonged turnaround, marked by leadership transitions and ongoing efforts to refine its strategic direction.

Market Conditions

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 Performance

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., through its subsidiaries, creates, produces, and sells luxury goods for men and women in Italy, rest of Europe, North America, Japan, the Asia Pacific, and Central and South America. The company offers men's and women's footwear; leather goods, such as handbags, suitcases, belts, wallets, and other men's and women's leather accessories; and knitwear, clothes for formal occasions, sportswear, and leisure wear, as well as outerwear, such as husky jackets, ponchos, and leather garments. It also provides silk accessories, including ties, foulards, scarves, etc.; home accessories comprising plaid throws, cushions, and beach towels; costume jewelry; and other accessories consisting of shawls and gloves. In addition, the company develops and distributes perfumes and fragrances. Further, it offers men's and women's sunglasses and prescription glasses; jewelry products; and watches. Additionally, the company is also involved in the real estate management business. Salvatore Ferragamo S.p.A. was formerly known as Salvatore Ferragamo Italia S.p.A. and changed its name to Salvatore Ferragamo S.p.A. in April 2011. The company was founded in 1927 and is headquartered in Florence, Italy. Salvatore Ferragamo S.p.A. is a subsidiary of Ferragamo Finanziaria S.p.A.

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, as evidenced by declining revenues and profitability. The company faces challenges in maintaining operational efficiency, with negative EBIT and net income in 2024. On the balance sheet, leverage is manageable, but equity has weakened. Cash flow remains positive, which provides some buffer against the earnings decline. Overall, the company needs to address its profitability and operational challenges to improve its financial health.

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
	EBIT
-49.00M	72.02M	127.94M	143.48M	-34.70M
	EBITDA
130.50M	241.85M	287.84M	299.03M	122.08M
	Net Income Common Stockholders
-68.09M	26.06M	69.61M	78.65M	-71.70M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
238.19M	304.26M	401.35M	511.80M	328.16M
	Total Assets
1.70B	1.81B	1.72B	1.85B	1.71B
	Total Debt
789.64M	791.17M	604.59M	736.36M	753.91M
	Net Debt
551.44M	522.18M	213.23M	224.57M	426.03M
	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: 5.46
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 5.46 is below the 20-day moving average (MA) of 5.77, below the 50-day MA of 5.67, and below the 200-day MA of 6.50, indicating a bearish trend. The MACD of -0.05 indicates Positive momentum. The RSI at 41.80 is Neutral, neither overbought nor oversold. The STOCH value of 19.25 is Positive, 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	€6.19B	12.44	8.52%	3.16%	2.87%	6.90%
MONC	73 Outperform	€14.88B	22.55	18.81%	2.37%	4.18%	4.35%
BC	64 Neutral	€7.22B	58.82	25.65%	0.89%	12.21%	4.24%
Sector *	62 Neutral	$6.94B	11.29	2.95%	3.87%	2.70%	-24.49%
SFER	47 Neutral	€928.62M	112.46	-10.16%	1.74%	-10.48%	-360.89%