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Sales at Tod's impacted by volatile environment

Jan 21, 2017 Italy
Sales at Tod's impacted by volatile environment
The Italy based luxury shoemaker announced nine months' results marked by a drop in sales. Weakness in consumption, mainly by tourists is pointed as the main driver 
“As expected, the sales figures for the nine months reflect a volatile and uncertain economic and financial environment, characterized by the persistent weakness of consumption in many important markets for luxury goods”, commented Diego Della Valle, Chairman and CEO of the Group, adding: “We remain focused on organic growth of the stores, accompanied by a selective and prudent strategy of network development, limiting ourselves to few openings and to special projects”.

Consolidated sales totaled 757.7 million euros in the first nine months of 2016, down by 3.7% from similar period in 2015. At constant exchange rates sales, would have been 751.9 million euros, down by 4.4% from last year.

Tod’s brand registered 419.4 million euros in sales in the first nine months of 2016; the decrease compared to 2015 reflects the weakness in consumption in major markets for luxury goods, mainly due to the sharp decline of tourist flows.

Hogan sales reached 171.9 million Euros, down by 2.8% from similar period in 2015, driven mainly by the weakness of the Italian market. Revenues of the Fay brand totaled 45.5 million Euros, up by 4.1%. Roger Vivier registered 119.8 million euros in sales, up by 6.9% with a positive performance across all markets, with the exception of the US.

Revenues from the shoes segment totaled 603.3 million euros, with a small decrease compared to the same period of 2015. Sales of leather goods and accessories totaled 103.8 million euros, showing a slight improvement in the third quarter. Sales of apparel totaled 49.5 million Euros, slightly higher than in the same period of 2015.

In the first nine months of 2016, domestic sales reached 243.9 million euros, reflecting a 4% decrease from similar period in 2015, also driven by lower purchases from tourists. In the rest of Europe, the Group’s revenues totaled 188.3 million euros, broadly flattish compared 2015, with France and the UK most suffering from the decline of sales to tourists. In the Americas sales totaled 69.5 million Euros, down by 6% from similar period in 2015. This performance is mainly due to the weakness in consumption, especially with regard to tourists. The Group’s revenues in Greater China totaled 152.9 million Euros, an 8.9% decrease driven mainly to the weakness in Hong Kong and Taiwan; while mainland China, which represents slightly more than half of this region, is showing some signs of improvement.

As of the 30th of September 2016, the group’s distribution network was composed by 266 DOS and 103 franchised stores, compared to 255 DOS and 95 franchised stores on the 30th of September 2015. Revenues to third parties totaled 304.1 million Euros, stable in comparison with the same period of 2015.

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