Q2 2023 Earnings Report for Ferrari (RACE)

Ferrari announced a significant increase in its second-quarter profit compared to the previous year, showcasing a 33% jump. The rise in profit can be attributed to the growing number of customers opting for expensive “personalization” options for their newly acquired sports cars.

Following these results, Ferrari has also revised its full-year guidance, predicting a revenue of approximately 5.8 billion euros ($6.4 billion) and a per-share profit ranging between 6.25 euros and 6.40 euros. Previously, the company had forecasted a revenue of around 5.7 billion euros and a per-share profit between 6.00 euros and 6.20 euros. Ferrari has upheld its earlier guidance of achieving an adjusted EBIT margin exceeding 26%.

“We continue to manage a very strong order book in all geographies,” stated CEO Benedetto Vigna. “The decision to revise the guidance upwards was supported in particular by stunning results in personalizations.”

In recent years, Ferrari has expanded its options lists extensively, providing customers with a wide range of choices for paint finishes, interior materials, and other intricate details. These expanded options, referred to as “personalizations” by the Italian supercar manufacturer, can substantially increase the price of a new Ferrari, often adding hundreds of thousands of dollars.

Ferrari reported a profit of 334 million euros (equivalent to 1.83 euros per share), representing a 33% growth from the previous year’s profit of 251 million euros (equivalent to 1.36 euros per share). Additionally, revenue climbed by 14% to 1.47 billion euros.

During the quarter, Ferrari’s margin on earnings before interest and tax (EBIT) experienced a significant increase to 29.7%, up from 25% the previous year. This surge in profitability was primarily fueled by the surge in personalizations and the sales of high-end and limited-edition models.

In the second quarter, Ferrari delivered a total of 3,392 vehicles, slightly down by 1.8% (or 63 cars) compared to the previous year. The decline can be attributed to “geographic and mix allocation plans.” However, on a year-over-year basis, deliveries increased in Europe, slightly decreased in China, and experienced a double-digit decline in North and South America.

Notably, the shipment included the initial examples of Ferrari’s new SUV-like vehicle, the Purosangue, which entered full production during the quarter. The deliveries were primarily driven by strong performance in the 296 GTB, a six-cylinder hybrid sports car, as well as the V-8 powered Roma coupe and Portofino M convertible.

Ferrari’s hybrid models, including the 296 GTB and the V-8 powered SF90, accounted for 43% of its second-quarter shipments, more than double the figures from the previous year.