Tod's says 2017 consensus earnings forecast a challenge
today May 5, 2017
Italian luxury goods company Tod's said it may struggle to meet market expectations for earnings this year after a bigger than forecast 4.4 percent drop in first-quarter revenue, driven by shrinking Italian and U.S. sales.
Tod's, famous for its Gommino loafers, said on Friday its first-quarter revenue was 238.5 million euros ($262 million), below a Thomson Reuters consensus estimate of 248 million euros and down 5 percent from a year earlier at constant currencies.
Revenue in Italy, its biggest market, fell 8.7 percent while sales in the Americas dropped 15.7 percent as fewer tourists visited the United States. In Greater China though, sales rose 3.6 percent despite ongoing weakness in Hong Kong.
Chief Financial Officer Emilio Macellari told analysts that full-year forecasts for revenues and earnings before interest, tax, depreciation and amortisation (EBITDA) "could be a bit challenging" to meet.
Analysts said the market was looking for full-year sales of 1.04 billion euros and EBITDA of 191 million euros.
Macellari said a weakness in wholesale revenue may extend beyond the first quarter, which recorded a 9.5 percent drop, while retail sales were flat during the period.
Macellari said he expected like-for-like retail sales to be "flattish" overall in 2017 after a 12 percent drop last year. In the first quarter, like-for-like retail sales fell 3.2 percent but the CFO said the drop should ease in the second quarter and sales should rise in the second half.
In a further boost, Tod's is planning to add about 10 new shops to its network this year.
($1 = 0.9095 euros)
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