MILAN — Italian luxury shoe and leather goods group Tod's SpA said Friday earnings grew 17.8 percent in 2007 and forecast "good results" for the current year, despite a challenging economic environment.
Buoyed by strong demand for high-quality footwear in Italy and the rest of Europe, the company, which owns the Tod's, Hogan, Fay and Roger Vivier brands, reported net profits for the 12 months ended Dec. 31 of 78.7 million euros, or $107.9 million at average exchange, ahead of analysts' estimates.
Sales for the period gained 14.7 percent to 657.1 million euros, or $900.6 million at average exchange, while earnings before interest and taxes increased 11.2 percent to 126.5 million euros, or $173.4 million. The operating margin was roughly flat at 19.7 percent.
Tod's chairman and chief executive officer Diego Della Valle said the double-digit improvement in revenues and profits confirmed the group's resilience in tougher times and despite the strong euro.
In January, Della Valle cautioned profits would likely fall below company expectations due to a slowdown in retail sales and the underperformance of leather goods and accessories in the run-up to Christmas.
That led Goldman Sachs last month to downgrade the luxury group to "sell" over concerns "the lost momentum in leather goods will be difficult to regain quickly."
However, in Friday's statement, Della Valle underlined his optimism for the current year, citing a "good" start in all product categories for sales of spring collections and a "positive" response to fall collections.
"[These] allow us to expect good results also in 2008 both for sales and profits," he said.
Tod's added its dividend would remain unchanged at 1.25 euros, or $1.98, per share.
The company's stock closed up 1.53 percent to 39.17 euros, or $61.89, at the end of trading in Milan on Friday. However, it has lost more than 18 percent of its value this year.
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