MILAN — Tariff refunds helped boost Safilo Group in the first half of the year, amid a challenging market for upscale eyewear worldwide.

On Tuesday, the Padua, Italy-based eyewear-maker, which produces eyewear for Kate Spade, Carrera, Tommy Hilfiger, Boss, Marc Jacobs, Victoria Beckham and David Beckham, said its adjusted group net margin rose 3.3 percentage points to 9.6 percent in the first half. Excluding tariff refunds, the adjusted group net margin stood at 6.6 percent, up 0.3 percentage points.

Safilo filed claims for duties previously paid in the U.S. and received 22.2 million euros in refunds, which the company intends to reinvest in the business.

In the six-month period ended June 30, group net profit totaled 49.4 million euros, up 46.7 percent from 33.7 million euros a year earlier.

First-half sales slid 1.9 percent to 512 million euros with declines across all geographic areas. Asia-Pacific, which represented 5.5 percent of total sales, recorded the steepest decline, with sales falling 17.2 percent. North America, which represented 40.1 percent of second-quarter sales, followed with a 6.1 percent decline. Europe, the company’s biggest market, representing 46.3 percent of sales, fell 3.2 percent, while the rest of the world declined 1.5 percent. The company said the Middle East market “stabilized” as the quarter progressed.

During a conference call with analysts, chief executive officer Angelo Trocchia cited a less supportive market environment.

“The second quarter developed within a softer demand environment in our core markets, as lower visibility and subdued consumer sentiment led our customers to adopt a more prudent approach to ordering,” Trocchia said. “Against this backdrop, we continued to focus on the levers under our control, protecting the quality of our business through disciplined commercial execution, a favorable price/mix and continued cost control.

“While the overall environment remains challenging, some positive signs we observed toward the end of the second quarter and into the beginning of the third give us more confidence as we look to the second half of the year,” Trocchia added.

The CEO also pointed to the promising acquisition of Spy+ and Serengeti, which was completed on July 1. 

Trocchia described the brands as “two iconic brands, highly complementary to our existing portfolio.”

North America Showing Positive Signs

He said trading in the first half of June and July confirmed that the business was on a “better trajectory” than it had been in April and May. “This is an encouraging sign. Customers are less nervous and getting used to the new reality. By geography…in North America should be better than second quarter…we see more positive signs.”

At the brand level, Kate Spade, Carrera, David Beckham, Marc Jacobs and Carolina Herrera outperformed in North America in the second quarter, while Blenders remained challenged. Smith posted positive results in the sports channel, driven by strong bike-business momentum that offset weaker winter-sports preorders.

Looking ahead, the company said it expects tariff rates to decline. The refund process is not yet complete, but Safilo expects any additional amount to be residual compared with the first-half benefit.

Safilo plans to invest one-third of the tariff-refund benefit in infrastructure, including IT and digital initiatives, as well as media support for brands including David Beckham and Carrera.