March 11, 2014 / 10:02 PM / 6 years ago

Salvatore Ferragamo sees growth as 2013 net profit rises

MILAN (Reuters) - Italian luxury group Salvatore Ferragamo (SFER.MI) on Tuesday forecast continued growth for this year as it posted a 43 percent rise in 2013 group net profit to 150 million euros ($208 million).

A shopper carries her purchases from the Salvatore Ferragamo boutique on Rodeo Drive, ahead of the Christmas festive season in Beverly Hills December 9, 2013. REUTERS/Fred Prouser

“The business trend recorded in the first months of the current year justifies expectations for growth also throughout 2014, in the absence of severely unfavorable market conditions,” the company said in a statement.

Analysts had expected the Tuscan group to post 145.9 million euros in net profit for 2013, according to a Thomson Reuters SmartEstimate.

Chief Financial Officer Ernesto Greco said a forecast of 285 million euros in core earnings before interest, tax, depreciation and amortization for 2014 was “realistic”.

The company said its EBITDA margin was 20.7 percent in 2013 and could reach 25 percent in the next few years, but did not specify when and said this “will take time”.

Ferragamo has fared better than fellow Italian shoemaker Tod’s, which posted an 8 percent drop in net profit on Tuesday.

This is partly due to the fact that Ferragamo makes most of its revenue outside the Italian market, which is struggling to emerge from recession, and sells more higher-margin leather goods apart from shoes, analysts say.

Ferragamo made 43 percent of 2013 revenue from shoes, and 33 percent from leather goods including handbags, while Tod’s makes over three-quarters of its revenue from footwear.

Chief Executive Michele Norsa said the company, whose founder made shoes for Marilyn Monroe and Audrey Hepburn, would focus on accessories other than footwear this year, and open around 15 shops, half of which would be in Asia.

($1 = 0.7212 euros)

Reporting by Sabina Suzzi; Writing by Isla Binnie; Editing by Robin Pomeroy

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