Safilo Reports Margin Growth Despite Currency Headwinds in 2025
Italian eyewear manufacturer Safilo Group has posted preliminary results for 2025 showing sales of €983.4 million, up 1.8% at constant exchange rates, with significant improvements in gross margin and cash generation.
The company's performance was marked by continued margin expansion, with gross margin reaching 60.9% for the year – up 120 basis points on 2024 – while adjusted EBITDA margin climbed to 10.6%, an increase of 120 basis points.
However, currency fluctuations impacted reported results, with sales declining 1% at current exchange rates due to the progressive weakening of the US dollar against the euro throughout the year.
Regional Performance Shows Mixed Picture
North America and Europe both delivered growth at constant exchange rates, rising 1.8% and 2.7% respectively for the full year. Europe's performance was particularly notable given headwinds from the deconsolidation of the Lenti business sold in June 2025 and lower volumes from a product supply agreement.
The prescription frames business drove solid organic growth across Europe's key markets, with the region showing mid-single digit growth when these factors are excluded.
Asia Pacific posted growth of 4.8% at constant exchange rates for the year, though the region slowed in the fourth quarter with an 11.5% decline.
Portfolio Strength Drives Growth
Safilo highlighted the performance of its sports division, with Smith products maintaining leadership in the US market. The company's contemporary and lifestyle portfolio also contributed significantly, with Carrera, David Beckham Eyewear, Tommy Hilfiger, Marc Jacobs, BOSS, Kate Spade and Carolina Herrera all playing major roles across key markets.
In the fourth quarter, Smith's physical store sales returned to growth, though the Blenders direct-to-consumer channel remained in negative territory.
Tariff Mitigation Supports Margins
The margin improvements came despite what Safilo described as "significant tariff pressures." The company implemented price adjustments in North America and progressively shifted sourcing outside China to counter these challenges.
Combined with favourable price and mix dynamics, these mitigation actions enabled the strong margin performance and cash generation.
Strategic Investments and Cash Position
In December, Safilo acquired a 25% stake in UK-based Inspecs Group for approximately £21.7 million (€24.9 million), signalling its appetite for selective acquisitions.
Despite this investment and completing an €18 million share buyback programme, the company generated free cash flow of €55 million for the year and reduced net debt to €46 million at year-end.
Fourth quarter free cash flow reached nearly €16 million before the Inspecs investment.
Outlook Remains Cautious
Looking ahead to 2026, Safilo acknowledged ongoing geopolitical and macroeconomic challenges that will continue to influence growth opportunities. The company stated it remains focused on developing the business both organically and through selective acquisitions.
Management expressed confidence in the group's position to continue strengthening profitability and cash generation while creating sustainable long-term value.
The full year results will be approved by the Board of Directors on 12 March 2026.
