Safilo Shares Rise as Q4 Profit Beats Expectations

Key Highlights of Safilo's Q4 Performance

Safilo Group reported a 12.4% increase in fourth-quarter adjusted EBITDA to €19.8 million, significantly surpassing analyst expectations of €13.4 million. This strong profitability, achieved despite a sales decline, prompted a 7.6% rise in the company's shares during Friday morning trade.

Financial Overview

The Italian eyewear maker experienced a 4.6% drop in Q4 sales, which totaled €225 million. This figure was slightly below the anticipated €227.4 million. The company's gross margin, however, improved by 240 basis points to 61.9%, indicating successful cost management and strategic price increases to offset tariff impacts. Sales growth varied by region, with North America up 1.5% and Europe up 0.7%, while the Asia-Pacific market saw a double-digit decline.

Economic and Market Impact

For the full year 2025, Safilo's sales decreased by 1% to €983.4 million, while adjusted EBITDA grew by 12% to €104.2 million. The company demonstrated strong financial discipline by reducing its net debt from €82.7 million to €46 million. This reduction was achieved even after spending on a 25% stake in Inspecs and share buybacks, signaling robust operational health to the market.

Summary

Safilo's fourth-quarter results highlight its resilience and ability to enhance profitability through operational efficiency, even with challenging sales figures. The market's positive reaction underscores investor confidence in the company's strategic cost controls and margin improvement. Future performance will depend on sustaining this profitability while addressing sales slowdowns in key international markets.

FAQ

Q: Why did Safilo's stock price increase if its sales decreased?
A: Safilo's stock rose because its adjusted EBITDA and gross margin significantly exceeded market expectations, showcasing strong profitability and effective cost management that investors valued more than the slight sales dip.

Q: How did Safilo improve its profitability in Q4 2025?
A: The company improved its profitability by increasing gross margins through price adjustments and shifting production away from China to mitigate tariff effects, alongside successful overall cost management.

Q: What was Safilo's net debt situation at the end of the year?
A: Safilo significantly reduced its net debt to €46 million from €82.7 million a year earlier, strengthening its financial position.

Source: Investing.com