Italian luxury goods group Salvatore Ferragamo on Thursday said 2023 had started well after posting a smaller-than-expected 10.8 percent drop in operating profit for 2022, as it shouldered higher costs in a push to relaunch the brand.

Earnings before interest and tax (EBIT) came in at €128 million ($136 million), after rising marketing and communication expenditure drove operating costs up 21.3 percent year-on-year.

“We are encouraged by the early results of the spring-summer 2023 collection, launched in our stores in February, and by the success of our recent fall-winter 2023 fashion show,” Ferragamo chief executive Marco Gobbetti said in a statement.

The company had reported in January a 5.7 percent rise at constant exchange rates in full-year sales.

The beginning of the year was also encouraging for sales in mainland China, Gobbetti told a post-results analyst call.

Ferragamo proposed to pay a dividend of 0.28 euros per share down from 0.34 euros a year ago.

The COVID pandemic crisis has hit family-owned Ferragamo just as the company was striving to rejuvenate its historic brand, famous for the shoes worn by Hollywood stars such as Audrey Hepburn.

Gobbetti, who joined in early 2022 from Burberry, has promised a quick turnaround, vowing to increase investments, revamp stores and attract younger customers to double 2021 revenues to almost €2.3 billion by 2026.

By Elisa Anzolin

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