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Weak performance in China affects Tod’s first quarter turnover

May 28, 2024 Italy
Weak performance in China affects Tod’s first quarter turnover
Ahead of the delisting, the Italian luxury group has reported a 6.7% year-on-year fall in turnover in the first quarter of the year, mainly due to a weak performance in the Chinese market
“With the success of the Tender Offer, the Tod's group is exiting the stock exchange. We made this choice to develop the full potential of our individual brands, making all the necessary investments in a timeline we deem most suitable. We have a great growth opportunity and we will try to seize it, operating with a long-term horizon”, commented Diego Della Valle, Chairman and CEO of the Group.

Earlier this month, Tod’s announced that the bid for Tod’s shares by Crown Bidco Srl, a subsidiary of L Catterton (affiliated with LVMH), had reached a total holding of more than 90% of the share capital, the threshold required for the company to be delisted.

First Quarter Results

In the first quarter of 2024, Tod’s reported a consolidated revenue of 252.3 million euros, a decrease of 6.7% on a comparable basis to the same period of last year. At constant exchange rates, the group’s revenue would have still fallen by 4.7% year-over-year to 257.9 million euros.

Tod’s and Roger Vivier brands “were visibly affected by the weakness of the Chinese market”, explained the company. In the first three months of the year, Tod’s brand sales decreased by 6.6% to 121.7 million euros and Roger Vivier’s sales declined by 23.2% to 52.7 million euros, as compared to the same quarter of 2023.  On the contrary, Hogan and Fay’s first quarter sales increased by 8.2% and 12.7% year-over-year to 61.5 million euros and 16.0 million euros, respectively.

The group performed well in domestic and European markets, “thanks to solid local demand and the important contribution of tourist purchases”. In Italy, sales fell only slightly by 0.6% in the first quarter of the year to 59.6 million euros and increased by 5.1% to 60.2 million euros in the rest of Europe, on a comparable basis to the same period of the previous year. In the US market, Tod’s recorded sales growth of 19.6% to 20.0 million euros, benefiting from an increase in points of sale.

On the other hand, the performance in the Greater China market, “impacted by the sharp drop in store traffic and weak consumption, as well as a particularly challenging comparison base”, led to a first quarter sales decrease of 24.0% to 67.3 million euros, as compared to a similar period of 2023. “The rest of the world area was also weak, despite good results from Japan and the Middle East”, Tod’s admitted, reporting a 5.8% decline in sales to 45.2 million euros.


Image Credits: fashionista.com



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