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Tod's first half reflects weak footwear performance

Oct 5, 2017 / Italy
Tod's first half reflects weak footwear performance
Sales in the first semester reached 483 million euros, down by 2.9% from similar period last year. Tod's and Hogan brand presented the weakest performances
“The results presented are in line with our expectations. The excellent market feedback received for our product confirms that we are on the right path, even though we need to speed up our execution plan”, commented Diego Della Valle, Chairman and CEO of the Group, adding: “Our primary goal is to keep our products in the highest range of craftsmanship and as expression of the best Italian lifestyle in the world”.

In the first half of 2017, consolidated sales totaled 483 million euros, down by 2.9% from similar period in 2016. In the second quarter, revenue reached 244.5 million euros, down by 1.4% from quarter two in 2016. At constant exchange rates, sales would have been 481.7 million euros, down by 3.2% from similar period last year.

Tod’s sales totaled 265.3 million euros in the first half of 2017; a 6.1% difference, compared to the first half of 2016 mainly reflecting the performance of shoes, the category with the highest exposure to the wholesale channel. Hogan revenue reached 98.7 million euros, a 6.9% decrease compared to the first half of 2016, mainly due to the weakness of the Italian market.

Revenue of the Fay brand reached 25.9 million euros, up by 4.1% from the first half of 2016 with good results in all the regions where the brand is distributed; and Roger Vivier confirmed the double-digit growth rate of the first quarter. Its sales totalled 92.6 million euros; strong results in all markets, excepted for the US, which continued to be penalized by the sharp drop of traffic in the stores.

Revenue from footwear totaled 386.3 million euros. The performance of this category, which has the highest exposure to the wholesale channel, has been affected by the prudent attitude taken toward this channel, in order to preserve the brands’ prestige and the outstanding quality of credit receivables.

Sales of leather goods and accessories totaled 68.1 million euros, with a small decrease compared to the first half of 2016, partially due to a different timing of deliveries, and sales of apparel were 28.1 million euros, up by 2.8% from the first half of 2016.

In the first half of 2017, domestic sales totaled 145.4 million euros, slightly lower than in the same period of 2016. The growth registered in the second quarter is mainly due to the different timing of deliveries; the Italian market confirms its weakness, mainly in secondary cities.

In the rest of Europe, the group’s revenue totaled 119.3 million euros, broadly in line with the first half of 2016. In the Americas sales amounted to 40.5 million euros, down 16.9% from the first half of 2016. According to Tod's this reflects the fact that the market remains weak with retail still suffering from lower traffic in the stores and the wholesale being affected by the difficulties faced by major department stores. The group’s revenues in Greater China totalled 108.5 million euros, up 1.4% from the first half of 2016. Mainland China registered positive results; Hong Kong is showing timid signs of improvement.  In the area Rest of the World the Group’s sales were 69.3 million euros, down by 5.1% from the first half of 2016. Japan posted positive results, while the sales performance in Korea was negatively affected by international political tension.

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