MILAN — A strong performance by the Tod's and Hogan brands, significant growth of the leather goods and accessories categories and a hefty hike in sales in the Asian market bolstered first-quarter profits and sales at Tod's Group.
The Italian luxury goods company said Wednesday that net income shot up 163 percent to 12.5 million euros, or $16.4 million, on a sales gain of 33 percent to 140.4 million euros, or $184.3 million. Dollar figures are at the average exchange rate.
The company said first-quarter results were not affected by currency fluctuations. At constant exchange rates, sales would have grown 34 percent to 141.5 million euros, or $185.7 million. Earnings before interests and taxes more than doubled, growing 157 percent to 20.1 million euros, or $26.4 million. The company attributed this growth to operating leverage, controlling costs and a "normalization of investments." In the first quarter this year, the company invested 4.7 million euros, or about $6 million, compared with 8.8 million euros, or $11 million, in the same period last year.
Diego Della Valle, chairman and chief executive officer of the group, said in a statement that results were "very satisfactory," and that they confirmed "the full success of our collections in all product categories and across all markets, further emphasizing the respect our consumers have for all of our brands."
The Tod's nameplate remains the group's cash cow, generating more than half of its sales, growing 30.9 percent at current exchange rates in the period and accounting for 54.7 percent of sales. Hogan sales advanced 38.6 percent, accounting for 28.6 percent of total revenues. The apparel division under the Fay brand remains a small category for the group, accounting for 14.5 percent of sales, but it, too, posted a 28.4 year-over-year gain.
By category, shoes continued to be the group's most profitable division, accounting for 65.8 percent of sales, and growing 31.2 percent compared with the same period last year. That said, leather goods and accessories grew even more, as the group reported a 40.5 percent growth in this category, which accounted for 20 percent of sales. "This result is fully in line with the group's strategy to reinforce the offer of leather accessories and confirms the full success gained by these recently introduced products among our customers," said the statement.On a geographical basis, all markets posted double-digit growth rates. While citing a challenging economy, the company said Europe's performance was "excellent." Sales grew 35.9 percent in Italy, the main market, and 29.9 percent in the rest of Europe. Tod's underscored that the 13.3 percent growth in the U.S. was influenced by the strong euro-to-dollar conversion. Net of this impact, sales would have grown 18.7 percent. Tod's said a 48.8 percent growth in Asia "confirmed the huge potential the group has in that area." At constant exchange rates, sales would have grown 52.5 percent.
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