Italy Tod's expects sales to turn positive in second half of year

Italian luxury group Tod’s like-for-like sales should improve in the second quarter of the year and turn positive starting from the second half, its Chief Financial Officer Emilio Macellari said on Wednesday.

The CFO told analysts in a conference call after first-quarter sales that he was not worried by first-quarter like-for-like sales, which saw a decline of 4.4 percent year on year.

Macellari said he was hoping that like-for-like sales would turn positive already in the second quarter.

He also said in a company’s statement on Wednesday that first quarter sales were in line with the company’s expectations as the impact of the new business model was not visible yet.

The CFO said earlier in January that results from the company’s new management team would be visible starting from the second part of the year.

“If the new strategic plan implementation continues according to our expectations, we can achieve excellent results in a reasonable timeframe” added the CFO in the statement.

He reiterated that the company was focused on generating growth in the mid-term.
First quarter sales fell by 5.2 percent to 226.1 million euros ($268.13 million) at reported rates, a decrease of 1.8 percent at constant rates.

Weather and merchandising mix were among the drags, as less-profitable small bags are currently the ones which sell the most, according to Macellari, and shoes from Tod’s, which is known for its Gommino loafers, are more suited for the summer.

By brand, Tod’s sales decreased 2.8 percent to 119.6 million euros, Hogan revenues were down 6.1 percent to 55.7 million euros, and sales of Roger Vivier decreased 8.7 percent to 37.8 million euros. Fay reported a 12.2 percent drop to 12.8 million euros.

By category, shoe sales declined 4.2 percent to 182.2 million euros and sales of leather goods and accessories were down 8.5 percent to 29.6 million euros. Sales of apparel decreased 10.2 percent to 14.1 million euros.

By region, domestic sales were down 11.6 percent to 70.2 million euros, Rest of Europe group revenues were up 0.5 percent to 57.6 million euros, and sales in the Americas dropped 8.5 percent to 15.4 million euros.

Sales in Greater China were down 3.2 percent to 48.7 million euros, while Rest of the World sales were down 1.4 percent to 34.2 million euros.

As of March 31, the group counted 276 directly operated stores and 118 franchised stores.​

Sales through directly operated stores totalled 127 million euros, down 7.1 percent, while revenues to third parties were down 2.6 percent to 99.1 million euros. 

Regarding the company’s plans to offer multiple collections throughout the year, the CFO added that the company will probably launch new products every two months.

The new strategy, dubbed “Factory”, will aim at launching several collections throughout the year to better engage with its customers, with a focus on the company’s more classic items.

The move, announced in February, follows the footsteps of Italian outerwear maker Moncler, which bid farewell to the catwalk in February to focus on monthly launches of new products. 

Additional reporting by Benjamin Fitzgerald