Salvatore Ferragamo: shares fall after 2017 results

(CercleFinance.com) - Salvatore Ferragamo shares are down 2.
5% at 21.1 euros on Friday morning after the Italian luxury group reported lower full-year earnings and said that it is cutting its dividend.

The Florence-based group said net profit reached 114 million euros in 2017, down 42.4% from 2016, while operating profit (EBIT) decreased to 186 million euros compared to 261 million euros in 2016.

Revenues fell to 1.4 billion euros, down 3.1%.

"As expected, Salvatore Ferragamo's full-year 2017 results are quite poor," analysts at Bryan Garnier reacted, pointing out - in particular with a "significant profitability erosion" and an operating margin of just 13.4%, from 18.1% in 2016.

Bryan Garnier - which maintains a "neutral" rating on the stock - has cut its target price to 20.8 euros from 21.4 euros previously, noting that 2018 has got off to a tricky start.

"It seems that the beginning of the year has remained challenging," the broker said.

As CEO Eraldo Poletto is about to leave the company, the firm has granted interim management powers to its president, Ferruccio Ferragamo.

Last but not least, Salvatore Ferragamo plans to propose to shareholders a dividend of 0.38 euro per share for 2017, down from 0.46 euro per share paid for 2016.

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