Tod's reiterated that it is confident that it will match market expectations of an increase of more than 12.0 percent in full-year sales as well as an Ebitda margin of nearly 26 percent. If business conditions do not change dramatically, the Italian group is also comfortable about analysts' forecast of an 8.0 percent rise in turnover in 2012 and a further improvement of the Ebitda margin to 26.5 percent. In 2010, Tod's booked sales of €787.5 million and an Ebitda margin of 24.5 percent.
The estimates indicate a slowdown in growth in the last quarter of 2011, compared with the rest of the year, as sales were hit by a warm September, affecting the start of the fall/winter season, a worsening of consumer confidence in Europe and a challenging comparison base.
In the first nine months of the year, the group posted a 14.8 percent increase in sales to €699.0 million thanks to the performance of directly operated stores (DOS) and Asia. At constant currency rates, the top line rose by 15.0 percent.
Revenues from shoes rose by 14.9 percent to €505.5 million, sales of leathergoods and accessories surged by 22.6 percent to €108.6 million, and turnover in apparel was up by 5.7 percent to €84.5 million. Sales of other products were down to €0.4 million from €0.5 million.
All brands booked higher revenues, with Tod's up by 19.9 percent to €372.1 million, Hogan by 8.2 percent to €228.4 million, Fay by 2.1 percent to €74.3 million and Roger Vivier by 65.6 percent to €23.5 million. The Tod's brand was boosted by double-digit growth in all geographic areas and product lines.
Turnover registered growth in all regions. Italy increased by 10.0 percent to €371.6 million. The group said that it is satisfied with the level of points of sale achieved in Italy for its four brands and does not intend to significantly increase the retail network, except by expanding the size of some its mono-brand stores to increase sales volumes. In the rest of Europe, revenues rose by 8.9 percent to €144.3 million. Greece was the only European country to book negative growth. North America was up by 15.9 percent to €43.8 million. On a currency-neutral basis, turnover in the region was up by 20.7 percent. In the U.S., the group's DOS posted strong double-digit organic growth. The company wants to rely more on its own stores and has reduced the number of wholesale accounts.
In Asia and the rest of the world, revenues surged by 37.9 percent to €139.3 million, led by China and Hong Kong. Tod's noted that the Japanese market, which represents 3.4 percent of overall sales, grew by 4.0 percent on a reported basis and by 10.0 percent at constant exchange rates. At the end of September, Hogan opened its first DOS in China. Another two stores were inaugurated in the Asian country in October.
By channel, revenues generated by sales to third parties and franchisees increased by 10.8 percent to €365.1 million and sales generated by DOS rose by 19.4 percent to €333.9 million. Same-store sales at DOS rose by 12.6 percent in the 45 weeks to Nov. 6, marking a slowdown compared with the 17.2 percent growth booked in the 31 weeks to July 31. China and Hong Kong had the highest increase in same-store sales, followed by Singapore and South Korea, while the U.S. outpaced Europe. The U.K. topped the ranking of fastest-growing European markets, on a comparable sales basis, followed by Germany, France and Italy.
After the lull registered in September, same-store sales were up by a double-digit pace in October. The group has assumed that same-store sales of its DOS will rise by between a high-single-digit and a low-double-digit rate for the whole fall/winter season. At the end of September, the group had 168 DOS and 70 shops in franchising against 158 DOS and 72 franchisees a year earlier.
Tod's said it has completed the sales campaign for next year's spring/summer collection and the backlog is up by a mid-single digit compared with last year, led by orders from the Far East. Orders from Greece declined but overall European orders were stable. Leathergoods continue to outpace footwear in orders.
The group's Ebitda margin rose to 27.5 percent of sales in the first nine months of the year from 25.8 percent a year earlier and the Ebit margin increased to 23.5 percent from 21.8 percent. Margins were lifted by growth in higher margin products, such as leathergoods, and countries.
Tod's invested €48.6 million in the nine-month period, but €20 million corresponded to a pledge to take part in the restoration of the Colosseum in Rome. The cash pile dropped for seasonal reasons to €64.5 million at the end of September from €88.7 million at the end of June.