Safilo Group S.p.A.

Reported net sales were down 4.5% at constant exchange rates in Q2 and down 1.9% in the first half. Q2 gross margin rose 11.5 percentage points to 73.1%, with 8 points from tariff refunds and 3.5 points from underlying improvement; first-half gross margin was 67.2%, up 6.1 points. Adjusted EBITDA reached EUR 49 million in Q2, up 75.2% year over year, with margin at 20.5%, and first-half adjusted EBITDA was EUR 86 million with a 16.8% margin. Adjusted operating profit was EUR 68.3 million in the first half, adjusted group net profit was EUR 49.4 million, and free cash flow was EUR 23.8 million in Q2 and EUR 36.4 million in the first half. Net debt ended June at EUR 5.4 million, or a positive net financial position of EUR 29.6 million pre-IFRS 16. Management did not provide formal next-quarter or full-year financial guidance, but said July was better than April-May and that H2 should improve versus H1, particularly in North America.

Angelo Trocchia framed the quarter as one where Safilo could not fully offset softer demand, but did protect business quality through disciplined execution, favorable price/mix, and cost control. He emphasized that the company generated strong cash, funded strategic investments with internal resources, and continued a disciplined capital allocation approach through acquisitions and a new buyback program. His tone was cautious on the environment but constructive on the second half, saying signs at the end of Q2 and early Q3 gave him greater confidence.

Michele Melotti focused on the bridge from weaker demand to stronger profitability: Q2 sales fell 4.5% constant currency, but gross margin expanded to 73.1%, adjusted EBITDA reached EUR 49 million, and free cash flow was EUR 23.8 million. He quantified the tariff refund benefit at EUR 22.2 million received at quarter-end, with EUR 20 million recognized in the P&L and EUR 2.2 million booked as a reduction to inventory; he also noted gross margin benefited from lower tariffs, favorable sourcing, deconsolidation of Lenti, pricing, and mix. He added that net debt fell to EUR 5.4 million and that underlying free cash flow excluding refunds and strategic investments was EUR 29.4 million in Q2 and EUR 46.9 million in the first half.

Analysts pressed on whether gross margin can keep expanding in H2, how much of the tariff refund will be reinvested, and whether the weak June-July environment had actually turned positive. Management said some H1 margin tailwinds will become less pronounced, but lower tariffs should remain supportive, any additional refund amounts should be residual, and about one-third of the tariff benefit will be reinvested mainly in IT/digital infrastructure and media support for Smith, Carrera, and David Beckham. On trading, management said April-May and early June were the weakest period, while late June and July showed better customer behavior, especially in North America. They also said they have no plan to pass tariff refunds directly to customers through pricing.