Tod's nine-month sales dip on currency, market headwinds

By

Benjamin Fitzgerald

Published
Nov 8, 2018

Italian luxury group Tod’s said on Wednesday nine-month sales dipped 2.2% on the back of lower revenues across its own Tod's and Roger Vivier footwear brands.

The Milan-listed company said consolidated sales for the first nine-months ending September 30, were 722.7 million euros. At reported rates, revenues totalled 706 million euros.

By brand, Tod’s sales totalled 386.9 million euros, broadly aligned with the same period last year, and came in at 376.3 million euros at reported rates, due to the negative impact of currency exchange, said the group in a statement.

Roger Vivier sales reached 132.3 million euros at constant rates, up 0.8%, or 127.4 million euros, at reported rates, which saw the ladies shoe brand bracing the impact of currency fluctuations, as well as market headwinds over the summer.

"The slowdown in the third quarter is mainly due to the weakness of some markets during the summer months, but the trend is showing significant signs of improvement in recent weeks and we are particularly confident about the end of the year, also considering the excellent acceptance of the new designer's (Gherardo Felloni) product," said the group, in discussing Roger Vivier.

The group's two remaining brands, Fay and Hogan, recorded revenues of 43.5 million euros, down 2.7%, and 159.3 million euros, up 1.6%, respectively.

Tod's shoe category remained its top-performer for the nine months, up 0.3% to 575.6 million euros, while apparel and accessories registered decreases of 1.5% and 0.6%, respectively.

By regions, domestic sales slid 4.4% to 217.5 million euros, "mainly due to the persistent weakness experienced by this market," said the group.

In Europe, the group’s revenues lifted 2% to 186.6 million euros, while the Americas amounted to 57.1 million euros at constant rates, relatively flat on last year.

Finally, Greater China totalled 159.8 million euros, up 3% with positive results in mainland China, which represents approximately 60% of this region, as well as in Hong Kong and in Macao. 

“Today’s results were broadly in line with our expectations," said Diego Della Valle, chairman and CEO of Tod's Group, who assured onlookers that the company's new business model, featuring changing retail layouts and product lines, will bear fruit in coming year.

"We are in the process of delivering to our stores the projects launched a few months ago. In these days, the initial effects of the new business model that will support our future growth (Tod's Factory) are starting to be visible and, from now on, every two months new products will arrive in stores, supported by strong and proper marketing and communication plans."

But not without a few months of digging deep and delivering on evolved customer needs, added Della Valle.

"We have to face now a period of hard work, paying attention to the continuous evolution of world markets, which will never reflect the same conditions we were used to operate in the past."