Italian fashion group Salvatore Ferragamo said it could not provide guidance on expected sales for 2020 due to the uncertainty caused by the coronavirus pandemic, which led to its revenues falling by nearly a third in the first quarter.
Core profits plunged by 82.2% to 12 million euros ($13 million) in the three months to March and the group posted an operating loss of 36 million euros over the period compared with a profit of 21 million euros last year, it said on Tuesday.
The Florentine leather goods brand reported last month that first-quarter sales had dropped by 31.4% at constant exchange rates as the health emergency forced luxury brands to shut stores first in China and then in Europe and the United States.
The decline is steeper than an average 25% sales drop forecast by consultancy Bain for the global luxury industry for the first three months of the year.
For the second quarter, Bain expects luxury goods sales to slump by 50% to 60%, even as some countries begin to ease government-imposed lockdowns and despite signs of recovery in the key Chinese market.
The consultancy, which produces closely followed forecasts for the luxury sector, foresees global sales of luxury handbags, clothing and cosmetics to shrink by between 20% and 35% this year.
The coronavirus emergency has complicated efforts by Chief Executive Micaela Le Divelec to turn around Ferragamo, which last year returned to sales growth for the first time since 2015.
Ferragamo said in a statement it had taken “several concrete actions to contain expenses and investments.”