Tod's reports H1 net loss, sales drop 4.7 percent

Italian firm Tod’s S.p.A., for its first half of 2019, reported consolidated sales were 454.6 million euros (509.5 million dollars), down 4.7 percent from H1 2018. At constant exchange rates, the company said, sales would have been 449.8 million euros (504.2 million dollars). The company added that its profit before taxes registered a negative balance of 6 million euros (6.7 million dollars), while net of taxes for the period and of minority interests, net income registered a negative balance of 6 million euros, which compares to a positive result of 33.2 million euros in H1 2018.

Commenting on the first half trading, the group’s Chairman and CEO Diego Della Valle, said in a statement: “Half-year results reflect the temporary effect of higher than expected investments we have decided to do to support our brands visibility, in a fiercely competitive landscape, where the leading global brands are increasingly prioritizing leather goods and, even more, footwear. The real challenge for us is now to become even more attractive for the young customers who live in the new markets, which are currently the major spenders on fashion and luxury goods. This will bring us the turnover that we need to have an adequate and more than satisfactory profitability.”

Review of Tod’s first half performance

The company said that revenues of Roger Vivier totalled 101 million euros (113.2 million dollars), up 11.6 percent, Hogan sales decreased to 100.5 million euros (112.6 million dollars); due to the weakness of the Italian market and sales of Fay brand dropped to 21.5 million euros (24 million dollars) entirely due to the weakness of the wholesale channel.

Tod’s said, revenues from shoes were down 367.8 million euros (412.4 million dollars), again due to the wholesale channel, while sales of leather goods and accessories improved to 62.3 million euros (69.8 million dollars). The company added that sales of apparel reached 24.1 million euros (27 million dollars); reflecting the performance trend registered by the Fay brand.

Tod’s H1 retail revenues increase 6.5 percent

In the first half, domestic sales decreased to 125.2 million euros (140.3 million dollars) due to the weakness of the wholesale channel, while the results in the retail channel are positive. In the rest of Europe, the group’s revenues totalled 115.3 million euros (129.2 million dollars), while in the Americas sales amounted to 34 million euros (38 million dollars), down 7 percent from H1 2018. The group’s sales in Greater China were 111.6 million euros (125 million dollars), up 2.3 percent, while the performance in Hong Kong worsened, due to the political tensions. In the area “Rest of the World” the group’s revenues were 68.5 million euros (76.7 million dollars), slightly higher than H1 2018 with the DOS channel growing in Japan and Korea.

Retail revenues during the period totalled 319.2 million euros (357.8 million dollars), up 6.5 percent, which was driven by the sound double-digit growth of e-commerce, while the same store sales growth (SSSG) rate, calculated at constant exchange rates was negative 4.5 percent. As of June 30, 2019, the group’s distribution network composed of 288 DOS and 114 franchised stores, compared to 285 DOS and 122 franchised stores as of June 30, 2018. Tod’s further said that revenues to third parties totalled 135.4 million euros; net of the impact of the acquisition of Italiantouch and the conversion into DOS of the Australian franchised stores, the weakness of the channel remains, especially in the domestic and European markets.

Picture:Facebook/Tod's