Tod’s Net Up 16.9 Percent

Footwear drives growth.

MILAN — Boosted by growth across brands and categories, in particular its footwear division, Tod’s SpA posted a 16.9 percent increase in net profits during the first half to 40.7 million euros, or $62.3 million, on a 9.7 percent rise in sales to 347 million euros, or $530.9 million.

This story first appeared in the August 29, 2008 issue of WWD.  Subscribe Today.

Diego Della Valle, chairman and chief executive officer, described first-half sales as “outstanding.” Despite the challenging economic environment, Della Valle said the “effectiveness of the group’s strategy” allows the company to continuously improve its results and its operating profitability.

“Based on the total fall-winter orders backlog, I can confirm our expectations to achieve a good growth in revenues and profits in the full-year 2008,” said Della Valle.

Sales of the Tod’s brand grew 3.9 percent to 180.8 million euros, or $276.6 million, while revenues at Hogan grew 23.5 percent to 117.1 million euros, or $179.2 million. Apparel brand Fay was in line with last year’s performance in the first half, with sales amounting to 38.8 million euros, or $59.4 million. Sales of the Roger Vivier brand grew 26.9 percent to 9.1 million euros, or $13.9 million. The company said this growth was “outstanding,” although not entirely meaningful because the Vivier brand is still in a start-up phase.

The footwear category grew 15.3 percent to 242.2 million euros, or $370.6 million. Revenues from leather goods and accessories showed a 5.2 percent drop compared with the first half of last year, reaching 65.4 million euros, or $100.1 million. However, the company said that this division picked up compared with the first quarter of the year, showing a 0.7 percent drop in the first half compared with a 2.8 percent decline in the first quarter at constant exchange rates.

“While the Pashmy line of bags is starting to achieve good results, the performance of higher priced leather bags was more influenced by the still challenging macroeconomic environment,” the company said.

Apparel grew 6 percent in the first half, reaching 39.1 million euros, or $59.8 million.

Sales in Italy grew 17.3 percent to 182.1 million euros, or $278.6 million, representing the company’s main market. Sales in the U.S. showed a 4.9 percent drop to 30 million euros, or $45.9 million. At constant exchange, however, sales in North America would have grown 8.2 percent in the first half. Sales in the rest of the world totaled 51.4 million euros, or $78.6 million, up 6.6 percent at current exchange, or up 12.9 percent at constant exchange. The company attributed this growth to the “outstanding results” achieved in the Far and Middle East, markets that the group is focused on developing.

All currency conversions were made at average exchange rates for the period.