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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on SFER

Negative drivers behind Salvatore Ferragamo S.p.A.'s recent performance include the company's struggles with a brand revamp strategy, leading to a decline in shares. The luxury fashion firm's cautious outlook is attributed to uncertain demand for high-end goods, exacerbated by the impact of U.S. trade tariffs on European markets. The departure of CEO Marco Gobbetti in March further adds to the uncertainty, as the company has yet to name a successor. Additionally, the potential for luxury goods to be affected by Trump tariffs poses a significant threat to the company's performance.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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A Fresh Look at Ferragamo (BIT:SFER) Valuation Following Recent 28% Share Price Surge

Oct -10

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Ferragamo Recruits New Ad Interim CFO from Company’s Ranks

Sep -11

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Tapestry sells footwear brand Stuart Weitzman to Caleres

Aug -05

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Caleres Completes Stuart Weitzman Acquisition, Reveals Brand President

Aug -04

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Ferragamo launches action plan after H1 loss

Jul -31

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Luxury Stocks Aren’t Celebrating the EU Tariff Deal. Here’s Why.

Jul -29

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Luxury Stocks Aren’t Celebrating the EU Tariff Deal. Here’s Why.

Jul -28

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European Stock Futures Climb After EU Clinches US Trade Deal

Jul -28

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.30%)

6. Segments

Footwear

Expected Growth: 4.5%

Salvatore Ferragamo's 4.5% growth in footwear is driven by increasing demand for luxury goods, particularly in Asia, and a strong online presence. The brand's focus on innovative designs, high-quality materials, and strategic partnerships also contribute to its growth. Additionally, the company's efforts to expand its presence in the Chinese market and strengthen its e-commerce platform have positively impacted sales.

Leather Goods

Expected Growth: 4.2%

Salvatore Ferragamo's 4.2% growth in Leather Goods is driven by increasing demand for luxury accessories, successful brand revamping, and strategic expansion in Asia, particularly in China. The company's focus on high-quality materials, craftsmanship, and innovative designs also contributes to its growth, as consumers seek premium products that combine style and durability.

Silk and Other

Expected Growth: 3.8%

The 3.8% growth in Silk and Other segment of Salvatore Ferragamo S.p.A. is driven by increasing demand for luxury accessories, expansion into new markets, and strategic partnerships. Additionally, the company's focus on sustainability and digitalization has enhanced brand appeal, attracting a younger demographic and contributing to revenue growth.

Apparel

Expected Growth: 4.8%

Salvatore Ferragamo's 4.8% apparel growth driven by increasing demand for luxury goods, successful brand revamp, and expansion in Asia-Pacific region, particularly in China. Strong online presence and strategic partnerships also contributed to growth, as well as a focus on sustainability and digital marketing.

Licences and Services

Expected Growth: 5.5%

The 5.5% growth in Licences and Services from Salvatore Ferragamo S.p.A. is driven by increasing demand for luxury goods, expansion into new markets, and strategic partnerships. The company's strong brand reputation, high-quality products, and effective marketing strategies also contribute to this growth. Additionally, the rise of e-commerce and digital platforms has enabled Ferragamo to reach a wider customer base, further boosting revenue.

Cash Flow Hedging Effect on Revenue

Expected Growth: 0.5%

Salvatore Ferragamo S.p.A.'s 0.5% revenue growth is driven by effective cash flow hedging, which mitigates foreign exchange risks. This allows the company to focus on its core luxury goods business, benefiting from a strong brand reputation and increasing demand in Asia. Additionally, strategic pricing and cost control measures contribute to the growth, while investments in e-commerce and digital marketing enhance customer engagement and drive sales.

Real Estate Leases

Expected Growth: 3.2%

Salvatore Ferragamo S.p.A.'s 3.2% growth in Real Estate Leases is driven by increasing demand for luxury retail spaces, strategic partnerships with high-end brands, and expansion into prime locations. Additionally, the company's focus on experiential retail and omnichannel integration has enhanced the appeal of its properties, attracting high-profile tenants and driving rental income growth.

7. Detailed Products

Shoes

Luxury footwear for men and women, including dress shoes, boots, loafers, sneakers, and sandals

Handbags

High-quality leather handbags, totes, shoulder bags, and clutches for women

Small Leather Goods

Luxury leather accessories, including wallets, keychains, and card holders

Ready-to-Wear

Luxury clothing for men and women, including dresses, tops, pants, and outerwear

Silk Accessories

Luxury silk scarves, ties, and other accessories

Timepieces

Luxury watches for men and women

Eyewear

Luxury sunglasses and prescription glasses for men and women

8. Salvatore Ferragamo S.p.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Salvatore Ferragamo S.p.A. is medium due to the presence of alternative luxury fashion brands and the increasing popularity of fast fashion.

Bargaining Power Of Customers

The bargaining power of customers is low due to the premium nature of Salvatore Ferragamo's products, which are often considered luxury items.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the company's dependence on high-quality raw materials and the presence of a few large suppliers in the market.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the luxury fashion industry, including the need for significant capital investment and a strong brand reputation.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established luxury fashion brands, including Gucci, Prada, and Louis Vuitton, which compete fiercely for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 52.31%
Debt Cost 5.81%
Equity Weight 47.69%
Equity Cost 10.29%
WACC 7.94%
Leverage 109.71%

11. Quality Control: Salvatore Ferragamo S.p.A. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Bijou Brigitte

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Value: 7.8

Growth: 4.0

Quality: 6.0

Yield: 8.1

Momentum: 7.0

Volatility: 5.7

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ElringKlinger

A-Score: 4.6/10

Value: 10.0

Growth: 1.9

Quality: 3.0

Yield: 3.8

Momentum: 6.0

Volatility: 3.0

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Wetherspoon

A-Score: 4.4/10

Value: 7.4

Growth: 5.1

Quality: 2.7

Yield: 1.2

Momentum: 3.5

Volatility: 6.7

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Watches of Switzerland

A-Score: 3.5/10

Value: 6.9

Growth: 6.4

Quality: 3.3

Yield: 0.0

Momentum: 2.5

Volatility: 2.0

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Lalique

A-Score: 3.0/10

Value: 4.9

Growth: 2.8

Quality: 4.7

Yield: 0.6

Momentum: 4.0

Volatility: 1.0

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Ferragamo

A-Score: 2.5/10

Value: 5.4

Growth: 1.1

Quality: 1.5

Yield: 2.5

Momentum: 2.5

Volatility: 2.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

8.06$

Current Price

8.06$

Potential

-0.00%

Expected Cash-Flows