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Salvatore Ferragamo: shares plunge after profit warning.

(CercleFinance.com) - Shares of Salvatore Ferragamo are down over 8% on Friday, after the Italian luxury house warned that it is unable to confirm its medium-term targets.

In a press release ssued last night, the firm blames the high IT and marketing expenditure that is needed to re-launch the brand and to optimise the group's commercial, production and logistics processes.

"Medium-term ambitions to grow twice as fast as the luxury market and improve margin have been compromised," broker Bryan Garnier commented in a reaction report on the stock.

As a result, the transition phase that characterized 2017 will also be extended into 2018, Salvatore Ferragamo said.

"This profit warning reinforces our dubitative position regarding the group's medium-term top-line growth targets," Bryan Garnier added, maintaining a "neutral" stance on the stock.

There are still too many uncertainties remaining at this point on the timing of the brand recovery. In a luxury market that is expected to decelerate in 2018, we continue to favour Richemont, Moncler and Hermes," the broker said.

Shares in Salvatore Ferragamo are currently down 7.6% at 20.8 euros in Milan.

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