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A “stunning” increase in supercar buyers adding expensive personalised features to their Ferraris led the luxury brand to upgrade annual profit expectations after profits rose by a third in the latest three-month period.
Even though car sales fell 2 per cent to 3,392 between April and June compared with a year earlier, revenues rose 14 per cent to €1.5bn and pre-tax profit climbed a third to €334mn.
The Italian group now expects to make €1.51bn to €1.54bn of adjusted profit this year, up from earlier guidance of €1.45bn to €1.5bn, with its revenues forecast also raised from €5.7bn to €5.8bn.
At the heart of the upgrade is the rising trend for supercar buyers to spend large sums, often tens of thousands of pounds, on personalising their new models, above and beyond the lofty advertised price.
Custom paint jobs, highly coloured brake callipers, which guide the brake pads and are visible inside the wheel, and even paying for Ferrari’s crest to be emblazoned on the side of their car, are among the most popular features for the car brand, all of which carry high margins for the company.
“The decision to revise the guidance upwards was supported in particular by stunning results in personalisations,” said Ferrari chief executive Benedetto Vigna. The personalisation income was “higher than initially expected”, Ferrari added.
Rising demand for high-margin bespoke features has been behind increasing profits across the luxury car segment, with both Aston Martin and Bentley flagging them as contributors this year.
The amount being spent on options by Ferrari buyers is also likely to increase, said Bernstein analyst Daniel Roeska, as sales increase for Ferrari’s four-door Purosangue model and super-luxury Daytona SP3.
That the company beat expectations “should come as no surprise” to investors, he added, calling Ferrari’s results “Groundhog Day”, though he said some investors might be disappointed that guidance was only raised slightly.
Ferrari shares slipped just under 2 per cent to €284.5 following the release.
“Higher revenues and margins from a greater options uptake is expected to be offset by continued cost inflation” as well as higher accounting costs as the company writes down investments from new models once they begin production, Roeska added.
