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Tod’s Profits Rise 8 Percent

Outlook for '09 'positive'.

MILAN — If the current economic environment is Darwinian, then Italy’s Tod’s SpA is proving to be among the fittest.

While other firms stumble, Tod’s chairman and chief executive officer Diego Della Valle said Tuesday that his company had made a “positive” start to 2009, after registering an 8 percent gain in earnings and revenues in 2008.

“The first signals of the current year may be considered positive,” Della Valle stated, attributing the group’s resilience to high product quality rather than following fashion trends.

He added that although the uncertain economy limited visibility, Tod’s aimed “to preserve and consolidate its market share and its profitability” by focusing on costs, improving operating efficiency and “great attention” to product innovation.

For the 12 months through Dec. 31, the Italian shoe and leather goods firm, which owns the Tod’s, Hogan, Fay and Roger Vivier brands, reported net profits of 83.4 million euros, or $122.7 million, on consolidated sales of 707.6 million euros, or $1.04 billion, which were in line with expectations. At constant exchange rates, revenues gained 9 percent to 716.4 million euros, or $1.05 billion.

The company left its dividend unchanged at 1.25 euros, or $1.70, a share.

Earnings before interest, taxes, depreciation and amortization were up 2 percent to 156.2 million euros, or $229.8 million. Tod’s net financial position was positive and down marginally to 72.8 million euros, or $107.1 million. The company noted its operating working capital requirements in 2008 declined to 33.2 million euros, or $48.8 million, from 45.8 million euros, or $62.8 million, in 2007.

Dollar figures were converted at average exchange rates for the periods to which they refer.

By brand, Tod’s delivered half the group’s revenues, gaining 2.6 percent to 356.7 million euros, or $524.8 million, while Hogan was again the best performer, rising 19.6 percent to 238.7 million euros, or $351.2 million. Sales at Fay increased 3.7 percent to 93.3 million euros, or $137.3 million, and those at Roger Vivier were up 5 percent to 16.8 million euros, or $24.7 million.

By category, the firm’s core product, shoes, grew 13.7 percent to 485.6 million euros, or $714.5 million, while apparel sales gained 5.9 percent to 94.5 million euros, or $139 million. However, sales of leather goods and accessories fell 9.1 percent to 126.6 million euros, or $186.3 million, as consumers cut back on discretionary purchases.

By region, sales grew in all markets except North America, where they dropped 10.5 percent to 59.3 million euros, or $87.3 million, which the company anticipated. Sales increased 15.2 percent to 384.1 million euros, or $565.1 million, in Italy; edged up 0.1 percent to 161 million euros, or $236.9 million, in the rest of Europe, and gained 6.9 percent to 103.2 million euros, or $151.8 million, in Asia and the rest of the world.

Tod’s shares fell 3.4 percent to 32.50 euros, or $44.30, at the close of trading on the Milan Bourse.