Tod’s Narrows net loss in first half
Strong business performance in Greater China and the strength of its e-commerce channel and Roger Vivier brand continued to drive Tod’s sales in the first half of 2021.
The Italian luxury group on Wednesday announced a drop in net losses of 20.7 million euros for the first six months of the year, against a loss of 80.6 million euros for the same period last year .
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Revenue increased 55.1% to € 398.4 million, compared to € 256.9 million in the first half of 2020, driven by a rebound in retail sales worldwide and across the board. its brands. H1 2021 revenue was still 10.9% lower than pre-COVID-19 levels.
“The second quarter of the year confirmed an acceleration in the group’s performance. I believe that the increase in volumes and the quality of revenues, as well as the careful control of overheads, will allow us to achieve a gradual improvement in margins, ”said Chief Executive Officer Diego Della Valle in a statement.
In the second quarter, sales totaled 219 million euros, up 110.4%, compared to 104.1 million euros in the same period last year. In the first half of the year, the current result before interest, taxes and depreciation amounted to 65 million euros against an operating loss of 18.7 million euros for the same period of 2020. The current result before interest and taxes is negative by 2.7 million euros. euros, compared to an operating loss of 94.1 million euros recorded in the first half of 2020. Tod’s EBITDA and EBIT for the first half of 2020 were impacted by an exceptional depreciation of inventories of 30 million euros. In a conference call, CFO Emilio Macellari answered questions from analysts about whether Tod’s was on track to meet the consensus targets of 785 million euros in revenue and 21 million euros. euros of EBIT loss for the whole year.
“I would be really surprised if we didn’t manage to reach 800 million euros in turnover this year. I think the EBIT target is achievable, reasonable, ”noted Macellari.
Tod’s brand sales increased 50.9% to 188 million euros. Roger Vivier’s income jumped 83.6% to 112.7 million euros. Hogan’s sales increased 38% to 80.5 million euros and Fay’s sales increased 35% to 16.8 million euros.
During the call, CEO Umberto Macchi di Cellere explained that brands like Hogan and Fay are smaller in size but continue to be “important”, especially in their key markets like China and Italy. “There is good growth potential for the future.
The Tod’s brand, he explains, has a “good distribution network and does not need to increase in size. There are still opportunities to be cashed in ”for the Roger Vivier brand.
“The focus is, without a doubt, on growth. In China and Asia, opportunities are more focused on Roger Vivier, if the strategy is viable and profitable from an economic point of view, ”continued Macchi di Cellere.
By category, footwear sales increased 54.5% to € 327.1 million, and leather goods and accessories sales increased 65.9% to € 49.8 million. Revenues generated by clothing amounted to 21.1 million euros, up 41.4%.
By geographic market, Italy increased by 35.5% to 88.8 million euros. Sales in Europe totaled 74.9 million euros, up 22.1%. Revenues in the Americas increased 58.2% to 25.4 million euros. Sales in Greater China climbed 110.2% to 156.2 million euros, while those in the rest of the world rose 33.8% to 53.1 million euros.
“New infections and new store closures in Japan, Korea and other Asian countries have caused a slowdown in the rest of the world,” Macellari added.
Retail sales totaled 292 million euros, up 57.7%, while sales to third parties amounted to 106.4 million euros, up 48.2%.
As of June 30, the group’s distribution network includes 304 own stores and 96 franchise stores, compared to 292 own stores and 112 franchise stores at the end of June last year.
Tod’s has rejuvenated its offering, targeting Gen Z, most recently appointing digital entrepreneur Chiara Ferragni as a board member, focusing on digitization and working to streamline its wholesale distribution.
Macellari pointed out that Ferragni’s involvement in the company is mainly based on his potential to communicate with a younger population rather than on commercial agreements related to Ferrari’s own brand.
“We now have someone on board who is credible and who has achieved significant penetration into a part of the younger customer market. It’s no secret that we are targeting younger customers, ”said Macellari.