Tod’s, Roger Vivier, Leather Goods Shine in Q1
The Tod's Group reported a 23.2 percent gain in revenues, also lifted by all its main markets, and China in particular.
MILAN — All product categories, markets and channels boosted the Tod's Group's performance in the first quarter of the year.
In the three months ended March 31, revenues rose 23.2 percent to 270.5 million euros, compared with 219.6 million euros in the same period the year before.
Diego Della Valle, chairman and chief executive officer of the group, touted “the excellent performance” of the company, highlighting the “outstanding” results at Tod's and Roger Vivier, “with excellent feedback in all product categories, confirming our customers' ever-increasing appreciation for the very high quality of our products, their craftsmanship and their Italian lifestyle.”
Della Valle underscored the growth in all geographic areas and in particular the contribution of the Chinese market, following the lifting of COVID-19 restrictions.
“We remain focused on our main goal to increase the equity value of both our group and our individual brands, through our continuous commitment to strengthen their positioning with the needed investments in marketing, communication and managerial skills, albeit in a logic of cost control and improvement of operational and managerial efficiency,” Della Valle said. “We continue to invest in our supply chain, to ensure the highest possible quality for our products. We will continue to grow selectively our distribution network, while remaining focused on both improving organic growth and developing the omnichannel distribution. The macroeconomic environment remains unpredictable, but considering the good sales trends we experienced in April and the excellent orders backlog for the winter collections, I'm confident about the group's future results.”
Sales of the Tod's brand climbed 24.4 percent to 130.2 million euros and Roger Vivier was up 30.9 percent to 68.6 million euros. The contribution of China, where both brands are present with their own network of points of sale in the most important luxury malls, was significant.
In the period, Hogan was up 10.1 percent to 56.8 million euros and sales of Fay jumped 30.6 percent to 14.2 million euros. The latter's performance was helped by the timing in wholesale deliveries, said chief financial officer Emilio Macellari during a call with analysts, as the brand is predominantly a wholesale business.
Sales of shoes rose 19.3 percent to 206.8 million euros.
Revenues of leather goods and accessories climbed 36.5 percent to 43.2 million euros.
“Leather goods outperformed everywhere,” Macellari said. The category's performance was “particularly good and encouraging. We have been working for years toward this. The results are homogeneous more or less around the world.”
Apparel climbed 37.2 percent to 19.8 million euros.
Sales in Italy gained 17.8 percent to 59.9 million euros. “This performance in Italy is not to be taken for granted and we are particularly happy with it,” Macellari said.
Revenues in Europe were up 18.3 percent to 57.3 million euros.
The company touted the strength of local demand and the important contribution of tourist purchases, especially from American, infra-European and Middle Eastern clients, in Italy and Europe, where tourists accounted for around 40 percent of sales, Macellari said.
In the Americas, sales rose 6.6 percent to 16.7 million euros.
The sales trend was positive, despite the shift abroad of a large part of the purchases of the American clients.
“We consider the U.S. a market of high importance and it is under-penetrated,” said
Macellari, noting that the goal is to further develop this market.
In Greater China, revenues rose
29.2 percent to 88.6 million euros.
The region is maintaining double-digit growth rates both in Mainland China and, even more, in Hong Kong and Macau.
The performance of China was above that of 2021, said Macellari, and better than 2019.
Questions on China recurred throughout the call and Macellari said the company had seen “a visible acceleration” from midor end of January onward and “it is still going on.”
Macellari said he did not expect Chinese customers to travel outside Asia before the end of the summer.
He said South Korea was “suffering a bit” in terms of local customers, but that tourists were helping “with a better performance.”
Sales in the Rest of the World area showed a 32.8 percent gain to 48 million euros, driven by the excellent results of Japan, Singapore and the Middle East.
Macellari said the consensus of a 9 percent gain in revenues in the year to 1.1 billion euros should be “relatively easy” to achieve, and that an improvement of
150 basis points in margins can also be achieved despite the extra expenses and communication activities.
Retail sales rose 23.6 percent to 193 million euros, representing more than 70 percent of sales.
As of March 31, the group comprised 333 directly operated stores and 89 franchised units, compared to 318 directly operated and 86 franchised stores at the end of March last year.
Wholesale sales were up 22 percent to 77.5 million euros.
The e-commerce channel is doing well, which is reaping the results of the important investments made by the group in the digital world, said Macellari, adding that around 50 percent of online sales are derived from the direct channel and 50 percent from third parties.
Macellari said no price increases are planned for the fall season, after a 10 percent increase for the spring collections.
Asked about Tod's collaboration with Lamborghini on a co-branded collection of leather goods, apparel, footwear and other accessories revealed in February, Macellari said this was a “very interesting and valuable brand,” which will help achieve higher visibility and boost Tod's brand awareness, increasing its perception of luxury,” while adding that he did “not consider the partnership will bring an incredibly high volume of sales.”