MILAN — Tod’s SpA posted a double-digit jump in 2005 profits, thanks to a lower cost base and a more advantageous tax rate.
Net profits for the 12 months ended Dec. 31 increased 38.7 percent to 53.4 million euros, or $66.8 million, the company said Thursday. Sales rose 19.5 percent to 503 million euros, or $628.8 million, in line with preliminary figures released last month.
All dollar figures have been converted from the euro at average exchange rates for the period to which they refer.
Tod’s president and chief executive officer Diego Della Valle issued an upbeat forecast for 2006.
“As far as the current year is concerned, considering the positive signals from the store network and the strong success enjoyed by the winter collections, I’m confident that our group will achieve a further significant growth of revenues and a more than proportional increase of margins,” Della Valle said in a statement.
Proportionally lower depreciation and amortization costs helped boost earnings before interest and taxes by 34.3 percent to 90.1 million euros, or $112.6 million.
Tod’s increased its headcount by 94 to 2,176 employees as of Dec. 31. Despite that, labor costs in proportion to sales diminished, falling to 14.8 percent of revenue from 16.1 percent in 2004.
Investments totaled 21.4 million euros, or $26.8 million, down from 27.3 million euros, or $33.9 million, in 2004. Most of those funds went toward the refurbishment of Tod’s directly owned retail network and the updating of logistical and production structures. Last year, the company remodeled stores in Düsseldorf, Hong Kong and Geneva and enlarged its New York flagship.
As reported, sales grew at a double-digit pace in every geographic market and product category. Sales of the Tod’s brand rose 20.3 percent to 288.5 million euros, or $360.6 million, while revenues at Hogan increased 23.3 percent to 126.1 million euros, or $157.6 million.
Footwear is still Tod’s largest product category, generating 62.6 percent of the group’s sales. Leather goods and accessories accounted for 22.2 percent of the total.
The company has a small but growing presence in apparel through the Fay brand, which saw its sales climb 12.3 percent to 77.1 million euros, or $96.4 million.
This story first appeared in the March 31, 2006 issue of WWD. Subscribe Today.