Ferrari Earnings!!
Before I start on these earnings, I need to talk about Attack on Titan. I am watching Hunter X Hunter right now with my little brother (shout out to Ethan), and I watched JJK with him a while ago too. They were both excellent, but Hunter is absolutely friking awesome. I started watching AOT because a friend is forcing me to go to the movie in a few days, but I would recommend it. So far, I’m really enjoying it. I thought it would be crazy corny, and it was in dubbed, but then I switched to subbed, which I usually hate, but it is so wildly preferrable. In dubbed, every character’s VA makes me want to jump into a Titan’s mouth, but in subbed, dis ish is fire.
Okay, now on to these fye earnings. Also, to contextualize, I recommended that my Aunt purchase Ferrari stock and she did, especially because she bought Costco on my recommendation four years ago, so if I seem very excited that they had a great quarter, that is why.
These earnings were for the full fiscal year, so there was a lot of data. The data was overwhelmingly positive, so earnings popped over 8% on the day. Revenue in the most recent quarter jumped to €1.74, which is up 14% compared to the previous quarter, which is a number I quite enjoy. I really like that number too because they only increased the number of cars they sold by 2%, to 3,325, meaning that the brand is not showing any weakness or anything approaching it. And the brand is what is keeping the prices and margins sky high, as the average price per car sold was over $500,000.
Operating profit jumped 26% (awww yeah), and EPS rose 32%. These numbers are EXCELLENT. And even better, all these key numbers beat the already lofty analyst expectations. These numbers were especially great too because they overcame the weakness from China, a place that has become a money pit for many other luxury brands. Even though numbers (shipments) from China were down 21% in the quarter, the brand is so strong, and the demand is so high in every other corner of the world, that there were thousands upon thousands of people ready to take those missing Chinese customers’ place.
And all those customers were ordering increasingly customized, AKA, super-duper mega profitable. Because, if you are worth millions/billions, then you will trick out and perfect the Ferrari you have been dreaming about for decades.
What I also quite like, for the mid to long-term, is the hybrid sales. Critically, more than half of the sales from this previous quarter were hybrid or fully electric. That lil’ number really blew my mind when I read it because I feel like pretty much every other car company, and yes, I know Ferrari is paradoxically the car company and barely a car company, has screwed up the electric transition. Ferrari, and this is part of the customization trend, has nailed the electric transition. The electric Ferraris are of the same quality as the non-electric Ferraris, they maintain insane power/speed, and they can jack up the prices even higher. AND PEOPLE KEEP BUYING THEM. They’re even buying them at a higher rate.
Their margins are 30%, which is about as high as I think you can get without sacrificing all of the supposed quality of your product cough cough LVMH.
And yeah, no China is a little lame, obvs, but I would rather Ferrari rebalance away from China, which they did successfully, than sacrifice any aspect of their brand prestige, which would lead to more long-term damage.
Ferrari is cycling through their lines effectively, they continue to rake in cash, and I genuinely see no reason to sell or stop holding this company. This was a great quarter, a great year, and this company continues to have an intrinsic quality that makes it practically invincible.
