Ferragamo shares boosted after confirmation of 2024 forecasts (#1683695)

Ferragamo shares jumped on Tuesday after the Italian luxury group confirmed its full year profitability forecast, despite the announcement of a likely impairment write-down in the range of €70-90 million.

The group confirmed the guidance at a time of uncertainty for the luxury industry, a Milan-based trader said. He added that the write-down has only an accounting impact.
Shares in Ferragamo were up almost 6% at 0915 GMT.

Ferragamo’s stock has lost almost half of its value in the last year and its market capitalisation slipped below €1 billion ($1.05 billion).

Purchases are driven by attractive valuations, with the stock close to an all-time low, another trader said.

Salvatore Ferragamo said late on Monday that an impairment test would likely result in write-downs of €70-90 million, mainly deriving from store lease agreements.

The group, which is struggling with a turnaround under CEO Marco Gobbetti, added that these impairment assumptions will not result in any financial pay-out and it confirmed the group’s operating profit forecasts.

Analysts at Equita, who rate the stock as ‘Hold’, added a note of caution after the statement.
“The need for these write-downs signals less visibility on the prospects of improvement of the group’s results in the medium term,” they said.

Ferragamo didn’t provide detailed full year guidance, but in October it said that the operating profit this year would be at the lowest end of analyst estimates, meaning around €30 million.