PADUA, Italy—Safilo Group S.p.A's board of directors reviewed and approved the company's Q1 2023 economic and key performance indicators. Angelo Trocchia, Safilo Group CEO, commented, “The first quarter of 2023 broadly met our expectations for the beginning of the year, reflecting the continuation of some of the main business drivers that had characterized the second half of last year. Our sales, on the whole substantially stable compared to the same period of 2022 and growing by 3.2 percent at the organic level, were driven by our home brands and our core licenses registering again good progress in emerging countries and above all in Europe, where the various markets of the area continued to expand nicely.

"Vice versa, the business environment in the United States remained soft, especially in the entry and mid-tier price points where we experienced still subdued order taking from our customers, and in sunglasses, impacted by unfavourable weather conditions in certain key states."

Trocchia said, "On the profit side, we are pleased with the continuation of our journey toward a better gross margin, which in the period grew to 58.4 percent of sales, up by 340 basis points compared to the first quarter of 2022, but we are also pleased to confirm an adjusted EBITDA margin in line with last year, at 11.3 percent of revenues, as we continued investing in marketing activities dedicated to our home brands and in supporting the development of our digital infrastructure and services.”

In North America, Safilo reported sales in Q1 2023 amounted to €124.7 million, down 3.4 percent at current exchange rates and 7.2 percent at constant exchange rates compared to €129.0 million recorded in Q1 2022, while organic sales were more stable, down 0.9 percent at constant exchange rates.

The U.S. wholesale market continued to register sustained demand for premium and high-end products, a trend from which also a part of Safilo’s portfolio benefited, while the propensity to purchase by independent opticians remained weak in the entry and mid-tier price points. In the quarter, Smith had a very positive performance in the direct to consumer (DTC) channel, but less dynamic in sports shops, due to the high comparison base with the corresponding quarter of 2022, in particular on bike products. In its lowest-season quarter, Blenders’s sunglasses were impacted by bad weather conditions on the California coast, the company reported.

In addition to strong sales in Europe, Safilo announced that its Rest of the World net sales in Q1 2023 amounted to  €28.8 million, marking another important growth, of 20.3 percent at current exchange rates and 16.6 percent at constant exchange rates, compared to  €23.9 million recorded in Q1 2022. Driving the expansion of the area was once again the Group’s strong commercial development in Brazil and above all in Mexico, where Carrera, Polaroid and all the core licenses recorded double-digit increases, both thanks to the greater productivity of the brands in existing stores and to the distribution extension.

Sales in India and the Middle East also posted significant growth rates, as the Group said it continues to invest in focused events to engage with the main local wholesale partners, as well as on the development of online channels through internet pure players.

The Group's net debt as of March 31, 2023 also remained substantially stable compared to Dec. 31, 2022, the company said, standing at  €112.4 million.