Safilo Posts Stronger Profits and Record Cash Flow in 2025 as Eyewear Giant Charts Growth Path

The Italian eyewear group reports improved margins across the board, secures key brand renewals, and stakes a 25 per cent claim in UK optical frames specialist Inspecs, all while navigating a turbulent currency and tariff environment.

Safilo Group has delivered its strongest financial performance in a decade, posting full-year 2025 results that show consistent margin improvement and a more-than-fourfold increase in free cash flow, news that will be closely watched by the independent opticians and eyecare chains that rely on the group as a major frame supplier.

The Padua-based group reported net sales of €983.4 million for the year ended 31 December 2025, a 1.8 per cent rise at constant exchange rates. Reported revenues dipped one per cent, dragged down by the sustained depreciation of the US dollar against the euro over the course of the year, a recurring headwind that masked what the company describes as a 2.6 per cent organic performance once the mid-year deconsolidation of lens subsidiary Lenti S.r.l. is stripped out.

Prescription frames drive the growth story

For optical retailers tracking category trends, the standout finding is the strong performance of prescription frames. Safilo says optical frames delivered robust growth across all major geographies in 2025, a trend that more than offset what it characterises as a "still challenging" environment in sunglasses, where promotional activity at the value end of the US market continued to weigh on sell-through.

In the Australia and Pacific region, which Safilo reports separately, the picture was particularly encouraging in the first three quarters, with Carrera singled out as a strong performer thanks to targeted brand-building activity and the rollout of a dedicated women's collection. Tommy Hilfiger also posted strong progress across the region. A Q4 demand normalisation brought the full-year Asia Pacific tally to €59.3 million, up 4.8 per cent at constant rates.

Margins back to their best in ten years

The group's gross margin climbed 120 basis points to 60.9 per cent, a level Safilo's chief executive Angelo Trocchia says represents a return to the highest profitability of the past decade. The adjusted EBITDA margin matched that improvement, rising from 9.4 per cent to 10.6 per cent, with adjusted EBITDA up 12 per cent to €104.2 million.

"We closed the year with net sales up 1.8% at constant exchange rates. We ended 2025 with a gross margin of about 61% and adjusted EBITDA at 10.6%, both up 120 basis points compared to 2024.", Angelo Trocchia, Chief Executive Officer, Safilo Group.

Several factors contributed to the margin improvement. The partial deconsolidation of Lenti, a lens grinding business with structurally lower margins, removed a drag from the product mix. Safilo also says it fully neutralised the impact of US tariffs on imported goods by the final quarter, combining price adjustments in the North American market with a shift in sourcing away from China. The weakening dollar, which hurt revenues, actually served as a tailwind on the cost of goods, given the group's dollar-denominated supply chain.

Cash generation surges; debt nearly halved

Free cash flow jumped to €68.1 million on a like-for-like basis, excluding the €24.9 million outlay for the Inspecs stake and the €11.9 million net proceeds from the Lenti sale, compared with €47.8 million in 2024. Net debt fell sharply, from €82.7 million to €46.1 million, even after an €18 million share buyback programme was completed in December.

The stronger balance sheet has prompted the board to approve a new buyback of up to 10 million shares approximately 2.5 per cent of issued capital underscoring management's confidence in the group's trajectory.

Strategic moves: Inspecs stake and Victoria Beckham licence

The most significant strategic development for the broader optical trade is Safilo's December acquisition of a 25 per cent equity stake in Inspecs Group, the UK-listed optical frames specialist. Safilo describes optical frames as "one of the most important areas for our long-term development" a signal that the group is looking to deepen its involvement in the prescription segment rather than remaining solely a brand licensee and distributor.

On the licensing front, the group signed a new ten-year agreement with Victoria Beckham for a global eyewear collection, targeting the aspirational women's market. Existing partnerships with Carolina Herrera, Under Armour, Dsquared2 and Pierre Cardin were also renewed during the year.

Supply chain and digital investments continue

Safilo continues to invest in the You&Safilo B2B digital ordering platform, which the group credits with strengthening relationships with independent opticians across Europe. The platform's growing adoption reflects efforts to make the day-to-day purchasing experience simpler for optical practices, an area that resonates directly with independent practitioners managing frame ordering and stock replenishment.

The disposal of Lenti S.r.l. in June, its in-house lens manufacturing subsidiary, marks a deliberate narrowing of Safilo's industrial footprint to focus on frame design, production and brand management.

Outlook: cautious optimism for 2026

Looking ahead, Safilo's board declined to reinstate a dividend, instead directing capital toward the buyback. For 2026, management acknowledged the continued complexity of the geopolitical and macroeconomic backdrop but said the group is well-positioned to sustain profit improvement and cash generation, with both organic initiatives and selective acquisitions on the agenda.

For Australian eyecare professionals, the key takeaways are a continued commitment to prescription frames as a growth category, ongoing investment in the wholesale and independent optician channel, and a group balance sheet that looks healthier than it has in years.