MILAN — Tod's Group posted a 30.5 percent profit gain in the first quarter as strong growth in its footwear and leather goods divisions bolstered results.
Earnings rose to 19.4 million euros, or $23.3 million at average exchange, in the quarter on a sales gain of 14.8 percent to 161.4 million euros, or $193.7 million.
Diego Della Valle, Tod's chairman and chief executive officer, said in a statement results confirmed "the soundness" of the group's growth, and that they were a "clear sign of the effectiveness of [the group's] strategy and of the strong growth potential for the next years."
Della Valle said he was "very satisfied with the orders backlog for the fall-winter collections." The executive echoed the upbeat forecasts made earlier this year. "Therefore, I can confirm our expectations to achieve in 2006 a significant growth of revenues and a more than proportional increase in profitability," he said.
Sales of the Tod's brand grew 17.6 percent, accounting for 56.1 percent of sales. Sales at Hogan rose 16.7 percent, accounting for 29 percent of sales. The group's apparel brand, Fay, grew 4 percent and accounted for 13.1 percent of total sales.
Footwear, which posted a 13.9 percent growth, remains Tod's largest product category, accounting for 65.3 percent of sales. However, leather goods and accessories showed a hefty 27.1 percent gain, accounting for 22 percent of sales. Apparel grew 2.1 percent.
Sales in Asia jumped 44.4 percent, and accounted for 15.4 percent of sales. The statement said this market "continued to achieve an outstanding performance also fueled by the group's ongoing focus on this important growing region." Last year, the company opened 15 stores in the region through franchising agreements, four of them in China. In the first quarter of 2006, it opened six franchised stores in Asia. As of March 31, the firm had 105 directly operated stores and 52 franchised stores.
Italy continues to be the group's main market, with a 48.4 percent share of revenue. The domestic market grew 15.3 percent. Europe and the U.S. grew 4.9 percent and 5.9 percent, respectively.
In the first quarter, earnings before interest and taxes grew 27.3 percent to 38.2 million euros, or $45.8 million, compared with the same period last year. The company attributed this gain to the "ongoing improvement of operating efficiency and leverage." Earnings before interest grew 32.5 percent to 32.3 million, or $38.7 million, in the quarter.
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