Retail Channel and Asia Market Buoy Tod’s 2021 Revenues

MILAN — Tod’s SpA on Tuesday reported preliminary 2021 revenues that beat expectations, boosted by a solid performance at retail and in Asia.

In the 12 months ended Dec. 31, revenues amounted to 883.8 million euros, up 38.7 percent compared with 637.1 million euros in 2020. Compared with 2019, sales were down 3.5 percent.

The Italian luxury company saw an acceleration in the last quarter of 2021, with sales climbing 9.6 percent compared with the same quarter in 2019. Compared to the last quarter of 2020, sales jumped 41.6 percent to 261.2 million euros.

“Fiscal-year 2021 ends with positive sales results that exceed our budget expectations,” said chairman and chief executive officer Diego Della Valle. “The group’s revenues have returned to pre-COVID-19 levels, driven by the acceleration of Tod’s in the second half of the year and the strong growth of Roger Vivier.”

Della Valle pointed to a “gradual recovery in the Western markets” that added to the “excellent results” seen in China and Asia in general, “with a trend that reflects the gradual improvement in market conditions, but confirms the great customer appreciation for the quality and creativity of our collections. These sales figures will allow our group to return to positive operating results already in fiscal-year 2021.”

Tod’s has been increasing its investments in digital platforms and Della Valle said these are paying off, delivering “important results in all business areas; the digital strategy is working and will increasingly become a key enabler of our global growth.”

Tod’s e-commerce channel recorded triple-digit sales growth compared to 2019.

The executive also said “the careful review” of the group’s distribution network over the last two years and slashing wholesale accounts “improved its productivity, and, overall, the direct channel has performed better than in 2019.”

Early feedback on the spring 2022 collections is “very positive,” allowing “to look forward to 2022 with optimism, provided that the current market conditions will not deteriorate due to the pandemic.”

In 2021, the Tod’s brand recorded a progressive improvement in revenues during the year, closing 2021 with sales of 428.3 million euros, up 44 percent compared with 2020 and down 6.1 percent compared with 2019.

This trend led the brand to record double-digit revenue growth in the fourth quarter of 2021 alone, compared to 2019, and in all geographic areas.

Roger Vivier’s revenues amounted to 229.6 million euros, up 43.5 percent compared with 2020 and up 16 percent on 2019.

Hogan and Fay were affected by their greater exposure to the Italian and European markets and to the wholesale channel. Hogan reported sales of 176.7 million euros, up 24.9 percent on 2020 and down 10.1 percent on 2019.

Fay sales amounted to 48.2 million euros, up 28.4 percent on 2020 and down 14.5 percent compared with 2019.

By category, shoes recorded sales of 703.2 million euros last year, up 35.5 percent on 2020 and down 3 percent on 2019.

Leather goods reported sales of 120.1 million euros, up 63.6 percent on 2020 and up 0.5 percent on 2019.

Sales of apparel amounted to 59.5 million euros, up 34.5 percent on 2020 and down 4.9 percent on 2019.

The geographical areas reflected the impact of the pandemic on the business of the various countries, in light of lockdowns and travel restrictions.

Revenues in the domestic market recorded a progressive improvement during the year and in the fourth quarter they returned to 2019 levels, thanks to local clients and Asian buyers. In the full year, sales in Italy totaled 217.2 million euros, up 32.7 percent on 2020 and down 16.6 percent on 2019.

The rest of Europe also improved, despite the slight slowdown in the last weeks of the year due to the restrictions in the wake of the Omicron variant. Sales in Europe amounted to 172.5 million euros, a 15.4 percent gain on 2020 and a 27.4 percent decrease on 2019.

The American market was also affected by the lack of tourists, but it recorded good progress during the year and revenues returned to the levels of 2019 since the third quarter, posting a further acceleration in the fourth quarter. Revenues in the Americas amounted to 62.5 million euros, climbing 70.6 percent on 2020 and decreasing 7.9 percent on 2019.

In 2021, business in Greater China was very solid and revenues totaled 313.4 million euros, up 58.2 percent on 2020 and up 45.9 percent on 2019.

The Asia and Rest of the World region recorded an “excellent” fourth quarter, said the company, driven by the significant improvement in results of Japan and Korea, where revenues largely exceeded 2019 figures in the fourth quarter. The region reported revenues of 118.2 million euros, gaining 30.2 percent on 2020 and decreasing 6.8 percent on 2019.

Revenues from the direct channel totaled 659.4 million euros last year, up 3.1 percent compared to 2019 and representing about 75 percent of the total. Compared with 2020, retail sales grew 47.4 percent. The company cited strong local demand, also driven by local marketing initiatives and pop-up stores.

As of Dec. 31, the group had 318 directly operated stores and 88 franchised units.

Wholesale sales totaled 224.4 million euros, up 19.1 percent on 2020 and down 16.4 percent on 2019.

In her report on Tuesday, Carole Madjo, luxury goods equity research at Barclays, stated the group indicated that it should return to positive operating profit in 2021, “while consensus was expecting a loss of around 10 million euros,” expecting shares to react positively the following day.

“Strong finish to year implies surprise positive operating profit,” wrote Flavio Cereda, equity analyst at Jefferies, in his report. Tod’s confirmed that reaching around 900 million euros in sales will mean the group expects to return to positive operating results in 2021, “which is a positive surprise” compared with the consensus of a loss of around 6 million euros. “This implies second half profitability above 2019 levels.”