MILAN — Riding the luxury wave, Tod’s SpA posted growth in both operating profit and revenues in the first nine months of the year.
Lifted by gains in all brands, at retail and wholesale and across geographic markets and product categories, the Italian firm reported a 23.5 percent rise in operating profits to 164.4 million euros, or $230.1 million, in the period ended Sept. 30, compared with the same period last year. The net profit was not released.
Revenues grew 14.8 percent to 699 million euros, or $978.6 million.
Earnings before interest, taxes, depreciation and amortization jumped 22.2 percent to 192.4 million euros, or $269.3 million, in the first nine months of 2011.
Dollar amounts have been converted at average exchange for the periods to which they refer.
Diego Della Valle, chairman and chief executive officer, stated: “The nine-months results confirm the sound growth of our group’s sales, in all brands, product categories and regions, and the ongoing improvement of the already strong operating profitability.”
He also underscored the performance of the group’s retail operations, noting that customers are drawn to quality and timeless products, both deemed “particularly important during challenging environments, like the current ones, especially in Europe.” Looking ahead, Della Valle said he was confident the group “will confirm a double-digit sales growth and a further improvement of the operating profitability also for the full year.”
The Tod’s brand continued to drive the group’s performance, with sales growing 19.9 percent to 372.1 million euros, or $520.9 million, in the first nine months.
Hogan revenues grew 8.2 percent to 228.4 million euros, or $319.7 million, mainly due to organic growth in Italy, said the company. Pursuing an international expansion, in Asia especially, in the third quarter Hogan opened its first three directly operated stores in mainland China — in Beijing, Wuhan and Harbin.
Sales of apparel brand Fay inched up 2.1 percent to 74.3 million euros, or $104 million. Roger Vivier revenues shot up 65.6 percent to 23.5 million euros, or $32.4 million.
Sales of footwear, which remains the group’s core business, rose 14.9 percent to 505.5 million euros, or $707.7 million. The company described the performance of leather goods and accessories as “brilliant,” as it gained 22.6 percent to 108.6 million euros, or $152 million, mainly driven by the success of the Tod’s-branded collection of handbags and accessories. Sales of apparel totaled 84.5 million euros, or $118.3 million, up 5.7 percent, boosted also by the strong results of the Tod’s and Hogan capsule collections, designed by Derek Lam and Karl Lagerfeld, respectively.
Geographically, sales were lifted by a 37.9 percent growth in the Rest of World area, totaling 139.3 million euros, or $195 million, with strong results in mainland China and Hong Kong.
The group said it has adopted a selective distribution strategy in the U.S., reducing the number of wholesale clients, which impacted sales. Revenues in the U.S. rose 15.9 percent to 43.8 million euros, or $61.3 million. At constant exchange rates, sales would have risen 20.7 percent.
Sales in Italy, the group’s main market, increased 10 percent to 371.6 million euros, or $520.2 million, while revenues in Europe gained 8.9 percent to 144.3 million euros, or $202 million.
Retail sales rose 19.4 percent to 333.9 million euros, or $467.4 million. As of Sept. 30, the group had 168 directly operated stores and 70 franchised units, compared to 158 directly operated stores and 72 franchised ones at the of September last year.
In the first nine months of 2011, the group invested 48.6 million euros, or $68 million, in tangible and intangible fixed assets, compared with 21.7 million euros, or $28.4 million, in the same period last year. This amount includes about 20 million euros, or $28 million, of the value of Tod’s agreement to sponsor the restoration of the Colosseum, which was set at 25 million euros, or $35 million. The remainder of the investments were aimed at the openings of new directly operated stores, with a focus on mainland China and other Asian countries; on the refurbishment of boutiques, and on production and logistics operations.
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