January 30, 2018 / 6:20 PM / in a year

Safilo sees 2017 adj EBITDA halving after Q4 sales drop 17 pct

Jan 29 (Reuters) - Italian eyewear group Safilo said its 2017 adjusted core profit was set to halve from a year earlier after fourth-quarter sales dropped more than expected as the loss of its license for the Gucci brand continued to bite.

French luxury goods group Kering <PRTP.PA, which owns Gucci, has turned a 350 million-euro Gucci license with Safilo into a four-year production deal as it set up its own eyewear business to better control distribution and pocket rich profit margins.

The owner of the Carrera and Polaroid brands reported net sales in the fourth quarter of 249 million euros, down 16.9 percent from a year earlier at constant currencies.

Safilo sees full year adjusted earnings before interest, tax, amortisation and depreciation (EBITDA) in the range of 38-40 million euros, down from 88.8 million euros last year.

Full year sales totalled 1.05 billion euros, a fall of 15.5 percent from 2016, as the Gucci’s loss was compounded by an IT-related disruption in deliveries at Safilo’s main distribution centre in Padua, Italy, and hurricanes in the United States.

When factoring in currency swings full-year sales were down 16.4 percent.

Analysts in a Thomson Reuters Poll had forecast on average full-year revenues of 1.08 billion euros. (Reporting by Silvia Recchimuzzi in Gdynia, editing by Valentina Za)

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