• Q1 profit falls 24.2% to EUR35.1m
  • Sales climb 1.5% to EUR257.7m
  • CEO confident of recovery
Tods saw sales climb 1.5% during the quarter

Tod's saw sales climb 1.5% during the quarter

Luxury apparel and footwear business Tod's has said it is confident it will recover from a double-digit profit decline in the first quarter, after being weighed down by strategic investments.

EBIT amounted to EUR35.1m (US$40.1m) for the three months to 31 March, compared to EUR46.3m in the same period of the prior year. The company attributed the decline to its decision to continue investing in its distribution network, communication, human resources and production capacity, and temporary lack of revenue growth.

Group sales climbed 1.5% to EUR257.7m from EUR253.8m last year. The group's Roger Vivier brand reported the largest growth (+5.3%), followed by Hogan (+3.7%) and Fay (+1.6%). Tod's, however, saw sales slip 0.3%.

In terms of products, shoes was the only category to post growth (+4.3%). The leather goods and accessories segment saw sales decline 15.7%, primarily due to a difference in timing of last year’s deliveries, while apparel reported a 1.5% fall.

Positive results were seen in Italy, Europe and in the Americas, while Asian markets remained weak.

"The quarter's results reflect a still challenging economic and monetary environment, with the persistent weakness of some important markets for luxury goods; in some parts of the world, they have been also influenced by the very bad weather conditions and by late deliveries of important products," said chairman and CEO Diego Della Valle.

He added: "The short term profitability has been temporarily impacted by the investments made in recent years, but we are confident we will recover it, or may even improve it, in a midterm perspective."

Tod's believes its leather goods segment will "show good results soon", and the company will focus on further developing the US market, which is "becoming attractive once again".