Tod's saw a decline in third-quarter sales, with the downward trend accelerating in terms of comparable store sales, as the group continued to struggle with a slowdown in tourist flows and weak consumer spending.

In the first nine month of the year, the Tod's group posted sales of €757.7 million, down by 3.7 percent from the same period of 2015. At constant currency rates, the top line was down by 4.4 percent.

By brands, sales fell by 7.5 percent to €419.4 million for Tod's and by 2.8 percent to €171.9 million for Hogan, while Roger Vivier rose by 6.9 percent to €119.8 million. The group's apparel brand, Fay, increased sales by 4.1 percent to €45.5 million, with double-digit growth in Asia.

On a currency-neutral basis, the top line fell by 8.4 percent for Tod's and by 2.9 percent for Hogan, which was particularly affected by the weakness of its sales in Italy. Also in local currencies, Roger Vivier's revenues grew by 5.5 percent with increases in all markets except the U.S..

By product category, footwear sales were down by 2.9 percent to €603.3 million across the group. Leathergoods and accessories fell by 10.3 percent to €103.8 million and apparel sales rose by 0.9 percent to €49.5 million. In local currencies, footwear slipped by 3.5 percent, while leathergoods and accessories fell by 11.8 percent.

In Italy, the group's overall revenues decreased by 4.0 percent to €243.9 million due to lower purchases by tourists, which had been boosted last year by the World Fair in Milan. Sales in the rest of Europe were down by 0.7 percent to €188.3 million, driven by the decline in tourist flows in France and the U.K.

At constant currency rates, revenues dropped by 0.4 percent in the rest of Europe, but the management pointed out that the decline of the pound sterling, stemming from the U.K.'s decision to leave the European Union in a referendum held on June 23, has made the country more attractive to tourists, leading to an improvement in the company's local performance since August.

In the Americas, the group's revenues fell by 6.0 percent to €69.5million. At constant currency rates, they were down by 8.0 percent. The region also suffered from a decline in tourist spending, while purchases by locals improved. The company added that it continues to see an improvement in demand from domestic customers in the U.S..

Sales in Greater China were down by 8.9 percent to €152.9 million, nearly entirely due to weakness in the markets of Hong Kong and Taiwan. Meanwhile, Mainlaind China, which represents just over half of the group's sales in the region, is showing signs of improvement. In a conference call, the chief financial officer of the group, Emilio Macellari, said that from September sales in Mainland China had been very positive, setting a “very interesting new trend” in the market. He noted, however, that the improvement could be due to Chinese customers cutting down on purchases abroad. In local currencies, nine-month sales were off by 10.4 percent in Greater China.

Sales in the rest of the world were up by 1.6 percent to €103.1 million, driven by a double-digit increase in South Korea, but they fell by 0.7 percent in the region in local currencies.

By channel, the revenues generated by the group's sales to wholesale clients and franchisees remained unchanged at €304.1 million, and fell by 0.6 percent at constant currency rates.  Revenues generated by directly-operated stores (DOS) dropped by 6.1 percent to €453.6 million at actual currency rates and by 6.8 percent on a currency-neutral basis.

Same-store sales were down by 14.6 percent in the first nine months, against a drop of 14.3 percent in the first half, indicating an estimated drop of about 15 percent in the third quarter. The worsening trend appeared in the months of July and August. Macellari stressed that the situation had improved in September and October, even though it remained negative.

The group had 266 DOS and 103 franchised stores at end September, against 255 DOS and 95 franchisees a year earlier.

Fourth-quarter sales have to grow by 4 percent to €260 million in order to meet financial analysts' expectations of a 1.7 percent increase in the group's sales for the full year, and Macellari indicated that this is possible. The group expects favorable foreign exchange rates to contribute €5-6 million to its top line.

Tod's didn't publish its operating results for the period, but Macellari also said the analysts' consensus of an Ebitda margin of 18 percent as “a bit challenging but doable.”

With about two-thirds of the 2017 spring/summer sales campaign accomplished, wholesale orders are down by a low single-digit rate, the management said, but Macellari believes that sales of the collections may be up overall thanks to a positive contribution from the company's own stores.