Sales rose by 11.4 percent to €250.1 million for the Tod's group in the fourth quarter of 2015, outpacing the top-line performance of the first nine months of the year as well as beating investors' expectations by about €15 million. The quarterly sales pushed up full-year revenues by 7.4 percent to €1,037 million. But at constant currency rates, full-year sales were up by only 1.8 percent.
For the 12 months, the Tod's brand posted a 5.5 percent rise in sales to €599.0 million, but they were down by 1.0 percent in local currencies. Translated into euros, reported sales grew in all regions except Greater China, which registered a slight decline. The brand also posted positive results for all product categories.
The Hogan brand was up by 4.2 percent to €221.4 million in the full year, with a positive contribution in all the regions where it is distributed. Fourth-quarter sales rose by 9.2 percent. Roger Vivier recorded an annual 22.9 percent sales increase to €156.0 million, with growth in all markets and a 30.8 percent increase in the fourth quarter. Fay grew by 3.7 percent to €59.4 million. At constant currency rates, Hogan grew by 2.8 percent in 2015, and Roger Vivier by 12.2 percent.
By product category, the group's footwear sales were up by 9.2 percent to €811.7 million in the 12-month period, lifted by a 12.9 percent increase in the fourth quarter. Leathergoods and accessories rose by 1.1 percent to €157.2 million, with 3.1 percent growth in the last quarter, and apparel sales went up by 2.3 percent to €66.9 million.
In local currencies, revenues were up by 3.3 percent for footwear, while leathergoods and accessories fell by 5.1 percent. The group stressed the “excellent results” of the new Tod's collection of handbags and expressed confidence for the future based on the positive trend being enjoyed by its spring/summer line.
The group's sales in Italy rose last year by 3.7 percent to €322.8 million, with fourth-quarter sales surging by 11.1 percent. The country's share in the group's annual sales continued to fall to 31.1 percent against 32.2 percent a year earlier.
Sales in the rest of Europe went up by 12.3 percent to €248.6 million, driven by Germany and the U.K. At constant currency rates, they were up by 9.4 percent.
In the Americas, revenues rose by 21.0 percent to €105.6 million, with fourth quarter-sales up by 25.5 percent. In local currencies, the annual turnover was up by 5.3 percent in the region.
Sales in Greater China were flat at €225.8 million, but declined by 12.0 percent in local currencies. The results were better than those previously reported for the first nine months, as the group said it started seeing “tentative signs” of improvement in mainland China, which represented more than half the sales in region, while no positive trend was yet visible in Hong Kong.
Sales in the rest of the world increased by 11.8 percent to €134.2 million, driven by “outstanding results” in Japan and South Korea. In constant currencies, they rose by 6.3 percent.
By channel, revenues generated by sales to wholesale clients and franchisees were up by a reported 8.3 percent to €378.6 million, and up by 5.5 percent at constant currency rates. Revenues generated by directly-operated stores (DOS) grew by 6.9 percent to €658.4 million at actual currency rates, but fell by 0.2 percent on a currency-neutral basis.
The trend in same-store sales tended to stabilize in the last weeks of the year, as they were off by 6.0 percent at constant currency rates for the whole year against a 6.1 percent drop reported for the 45 weeks to Nov. 8. Retail sales were hit by the Paris terrorist attacks of Nov. 13, but normalized in the last weeks of the year.
At the end of December, the group had a network of 257 DOS and 98 franchised stores, up slightly from 255 DOS and 95 franchises at the end of September and compared with 232 DOS and 93 franchisees a year earlier.
The group will release complete full-year results on March 14. Financial analysts expect the company to post earnings before interest, tax and depreciation (Ebitda) slightly above €200 million, presenting an Ebitda margin of about 19.4 percent down from 20.0 percent in 2014, and net profits of over €100 million.
Analysts anticipate that the Ebitda margin will rise by about 20.6 percent in 2016, partly thanks to the purchase of the Roger Vivier brand, resulting in the elimination of royalty payments. The group's capital expenditures for 2015 are estimated at €52-53 million, partly due to addition of 25 DOS, according to the daily Il Sole 24 Ore. This year's investments are likely to fall to €45-50 million as the group returns to its annual average of about 15 extra stores, the newspaper said.
Tod's completed on Jan. 27 the purchase of the Roger Vivier brand from Gousson, a company owned by Diego Della Valle, the chairman of Tod's. The tag price was €415 million. Tod's already had the rights to the Roger Vivier brand name under a licensing agreement. As planned, Gousson reinvested €207.5 million in Tod's by buying 2.48 million ordinary shares through a reserved capital increase. According to a stock exchange filing, the deal allowed Della Valle and his family to raise their stake in Tod's to 60.66 percent, of which 7.51 percent is held through Gousson, from the 56.76 percent held previously.
Meanwhile, Luca Cordero di Montezemolo, an influential Italian businessman who was previously chairman of the Fiat and is currently chairman of Alitalia, has resigned from the board of Tod's due to “unexpected additional professional tasks.” He had been appointed to the board on April 22, 2015 but resigned with immediate effect on Jan. 22. Montezemolo held 233,200 ordinary Tod's shares when he resigned.