Tod’s enjoyed a 5.4 percent increase in first-quarter sales to €201.3 million thanks to the strong performance of its footwear business and its home market, Italy. At constant currency rates, the increase reached 4.9 percent.
Shoe sales jumped by 11.0 percent to €144.7 million, while revenues stemming from leathergoods and accessories plummeted by 12.4 percent to €31.6 million. The company noted that volume sales of leathergoods and accessories are in line with the previous year but clients have focused more on its cheaper Pashmy line and the canvas models of its G-Bag collection.
The G-Bag is available in canvas, leather, python and crocodile and each line has very different pricing points. A large G-Bag made in fabric has a retail price of €490, while a similar leather bag is sold at €990 and a python one at €1,290.
Apparel sales rose by 2.2 percent to €24.8 million and other revenues were stable at €0.2 million.
Sales by brand showed that Tod’s rose by 0.3 percent to €97.5 million, Hogan jumped by 17.5 percent to €74.5 million, Fay increased by 2.7 percent to €25.2 million and Roger Vivier slumped by 22.8 percent to €3.9 million. Revenues from other brands dropped to €0.2 million from €0.8 million.
By region, sales increased by 16.2 percent to €116.5 million in Italy, fell by 4.8 percent to €46.5 million in the rest of Europe, dropped by 21.6 percent to €11.0 million North America and slipped by 1.9 percent to 27.3 million in Asia and the rest of the world.
By channel, revenues generated by sales to third parties and franchisees increased by 5.7 percent to €127.2 million and sales generated by directly operated stores rose by 4.9 percent to €74.1 million.
The group’s sales in the first three months of the year are traditionally skewed toward wholesale, as spring/summer deliveries to DOS generate revenues only in the second quarter. DOS sales represented 47.4 percent of overall group turnover in the full year of 2008 compared with 36.8 percent in the first quarter of 2009.
In the 18 weeks to May 3, the group’s comparable sales at its directly operated stores fell by 0.8 percent, reversing the slightly positive trend seen in the first 11 weeks of the year. At the end of March, Tod’s had 150 DOS and 72 franchises compared with 130 and 62 respectively a year earlier.
Despite weak sales for its most profitable products (leathergoods and accessories), Tod’s managed to maintain its gross operating margin (Ebitda) at 22.7 percent of sales, in line with the first quarter of last year. Ebitda rose to €45.7 million from €43.7 million and Ebit was slightly up to €37.9 million from €37.2 million.
Operating costs were held in check, rising by 6.3 percent to €159.9 million. Meanwhile, the company halved its investments to €6.1 million from €12.0 million, in line with its full-year guidance of a drop in investments to €20-21 million against €40.8 million in 2008.
Tod’s described the order intake for its fall/winter collections as “good” and despite the lack of visibility confirmed its full-year target of maintaining its market share and profitability.
A consensus of financial analysts’ forecasts indicates that the company should slightly increase full-year sales to nearly €710 million from €707.6 million in 2008 but operating profits will decline and the Ebitda margin will be trimmed to about 21.0 percent of sales from 22.1 percent.