World Footwear

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Tod's revenue declines

May 16, 2019 Italy
Tod's revenue declines
Consolidated sales for the Italian-based group amounted to 216.4 million euros in the first quarter of 2019, down by 4.3% from similar quarter in 2018
Diego Della Valle, Tod's Chairman and CEO, commented: “The return to retail growth is a positive indicator, which confirms the validity of the strategic decisions made (...) We are very  pleased with the performance of our e-commerce, growing at a solid double-digit figure,  and we plan to support it with resources and people to make it grow even faster. Considering the strong competitiveness of our industry, for the success of our strategy we believe it is essential to increase our investments to make our products and our brands even more visible and desirable. In brief, we think we have the right strategy and we need to speed up the execution to achieve the expected results.”

First quarter review

In the first quarter of 2019, consolidated sales totalled 216.4 million euros, down by 4.3% from similar period in 2018. In the current year, currency fluctuations made a positive contribution, particularly to the Tod’s and Roger Vivier brands, which have the greatest presence abroad. At constant exchange rates (using the average exchange rates of the first quarter of 2018) sales would have reached 213.2 million euros.

By segment of business

Tod’s sales totalled 106.4 million euros in the first quarter of 2019; the decrease, compared to the first quarter of 2018, is entirely due to the wholesale channel, while the results in the retail channel are visibly positive. Hogan revenues were 54 million euros; also in this case, the  decrease is entirely due to the weakness of the wholesale channel. Retail revenues are growing, with excellent results in China and some signs of recovery also in Italy. Sales of Roger Vivier totalled 43.9 million euros, up by 16.2% from quarter one in 2018. Finally, sales of Fay were 12 million euros; the decrease, as compared to the first quarter of 2018, is mainly due to the weakness of the domestic market, mainly in the wholesale channel.


By product

Revenues from shoes were 175.3 million euros in the first quarter of 2019;  the  decrease, as  compared to the same period of 2018, is mainly due to the wholesale channel. Sales of leather goods and accessories totalled 27.6 million euros; similarly to what has been said for shoes, the result is penalized by the weakness of the wholesale channel. Good results for the new families of the Tod’s brand. Finally, sales of apparel were 13.4 million euros; the performance broadly reflects the trend registered by the Fay brand.

By geographies

In the first quarter of 2019, domestic sales were 63.6 million euros; the decrease, compared to the same period of 2018, is entirely  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 totaled 54.8 million euros; also in this region, the retail channel was positive, while the wholesale was affected by a particularly cautious approach to the weakest markets. In the Americas sales amounted to 15.1million euros; the 1.9% decrease from the firts three months of 2018 is entirely due to the wholesale channel. The retail channel registered positive results, mainly thanks to purchases from local customers. The  Group’s sales in Greater China totaled 50.2 million euros, up by 3.1% from similar period 2018. Positive results in mainland China, which represents approx. 60% of this region, in Hong Kong and in Macao. Finally, in the area Rest of the World the group’s revenue were 32.7 million euros; the 4.6% decrease is entirely due to the wholesale channel. The retail channel posted positive results; strong performance in Japan.

By channel

The performance of the wholesale channel was particularly negative and influenced all brands,  product categories and geographical areas. The comparison of quarterly data, broken down by  distributionchannel, is also affected this year by the already commented acquisition  of Italiantouchand by the conversion from franchising to DOS of stores in Australia.In the first quarter of 2019, retail revenues totalled138.8million euros, up by 9.2% from the same period of 2018. Same Store Sales Growth (SSSG) rate, calculatedat constant exchange rates as the worldwide average of sales growth rates registered by the DOS network, is -2.5% in the first quarter of the year (from the 1st January to the 31st March 2019). At reported rates, the value is more than 200 bps higher.

Tod's distribution network

As of the 31st of March 2019 Tod's distribution network was composed by 283 DOS and 118 franchised stores, compared to 276 DOS and 118 franchised stores as of 31st March 2018. Revenues to third parties totaled 77.6 million euros; net of what has already been said on the impact of the non-homogeneous comparison, the weakness of the channel remains, especially in the domestic and European markets.

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