MILAN — Tod's SpA posted double-digit profit growth in the first half on a lower cost base and accelerating sales momentum for its handbags and shoes.
Tod's net profit for the six months ended June 30 rose 18.5 percent to 34.8 million euros, or $42.8 million at average exchange rates for the period. Sales for the period rose 15.7 percent to 316.4 million euros, or $389.2 million, in line with preliminary figures released in July. Growth at constant exchange rates would have been 17.8 percent, the company said.
Tod's chairman and chief executive Diego Della Valle said the "strong success" of the Tod's fabric Pashmy bag and the debut of newly tapped creative director Derek Lam's first Tod's collection for fall 2007 make him optimistic about the future. He said the company is on track to post double-digit revenue and profit growth for full-year 2007.
"[The] first-half results confirm the solidity of our group's growth and the effectiveness of our medium-long-term strategic business plan," Della Valle said in a statement. "Therefore, I can confirm a sound double-digit growth of both revenues and profits."
First-half earnings before interest and taxes rose 14.7 percent to 58.2 million euros, or $71.6 million. The company said its operating profit benefited as sales increased and its proportion of depreciation and amortization costs declined.
The company said a strong euro bit into sales at the Tod's brand, its most international label. Sales at Tod's rose 6 percent to 174.1 million euros, or $214.1 million, but would have grown nine percent at constant exchange rates.
Hogan and Fay, two brands with a largely European presence, fared better. Revenues at Hogan grew 25.7 percent to 94.8 million euros, or $116.6 million, while sales at Fay advanced 30.6 percent to 38.6 million euros, or $47.5 million.
First-half sales at niche footwear brand Roger Vivier more than doubled to 7.1 million euros, or $8.7 million.
In August, Tod's ended franchising partnerships in South Korea and took over the control of seven stores in the country. It also opened a new boutique in Macao. The company's distribution network currently includes 124 owned boutiques and 61 franchised stores.
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