Tod’s, how Della Valle’s counts cry
Turnover of 256.9 million euros (-43.5% compared to the first half of 2019) for Tod's. All the salient numbers of the six-monthly report of the group led by Diego Della Valle
Covid makes shoes at Tod's.
Tod's board of directors yesterday approved the results for the first half which are heavily affected by the pandemic effect.
Turnover of 256.9 million euros (-43.5% compared to the first half of 2019). "The sharp drop in revenues – reads a note from the group – reflects the effects of the restrictions put in place to deal with the spread of the Covid-19 pandemic, restrictions that led to the closure of shops and severe restrictions on the movement of people, with an exceptionally negative impact on tourist flows ". The company then speaks of "a gradual resumption of activity, and of different intensity, in the various areas of the world".
THE REASONS FOR THE COLLAPSE
The decline, which began naturally in China due to the coronavirus and then extended to Europe and the Americas, was particularly strong in the second quarter of this year. And it will not be easy for the group to get out of it quickly, as 78% of the stores in the global network had reopened by June 30 alone.
THE FORECASTS OF ANALYSTS
The numbers of the group headed by Della Valle were essentially predicted by a study by Mediobanca Securities, the London branch of analysts of the Milanese investment bank. Mediobanca Securities analysts recalled days ago that in mid-May or "at the time of publication of the first quarter financial statements, Tod's had already announced that the performance of the second quarter would be worse than that of the first due to the lockdown that had imposed the closing of the stores first in Europe and then in the US, while he had declared a recovery of business in China ”, since the restrictions had started here and therefore had been relaxed earlier than in the rest of the world.
THE REPORT
On that occasion, the management had provided an indication of an EBIT loss in the first half of the year. “So we expect second quarter revenue to decline 56% yoy to 105 million as a result of a 60% yoy drop in fall-winter wholesale orders, postponed deliveries from the year before, plus that due to a 55% decrease in retail purchases ”, the analysts of Piazzetta Cuccia explain.
THE MEDIOBANCA NOTE
“For the first half of the year, this means for us a forecast of revenues down 43% on an annual basis compared to 456 million in the first six months of 2019, to 257.3 million. We estimate a loss in EBITDA of 40.1 million compared to +80.4 million in the first half of 2019 since the reduction in activity was only partially offset by some savings in the marketing, rentals and personnel areas. This could translate into a net loss of 117.1 million in the first half of the year from -5.7 million in the same period of 2019 ", estimated Mediobanca which also expects a half-year ebit of -114.6 million, from the +5.8 million of first six months of 2019.
FORECASTS
The investment bank stresses that its projections are more cautious than those of the Bloomberg consensus for the half year which indicate revenues of 277.3 million, ebit of -60.2 million and a net loss of 67.1 million. “Our attention is focused on the indications that will come from the management on the commercial activity and on a possible outlook for the last part of the year”, concluded Mediobanca.
THE WORDS OF DELLA VALLE
Despite everything, the president Diego Della Valle is confident for the future and is already looking forward to 2021: "We are convinced that our Group has all the characteristics and tools necessary to overcome this exceptional crisis and return to growth, thanks above all to the great respect that our loyal customers have for our brands and for the excellent quality of the products and thanks to the financial solidity that has always characterized us. We are now very focused on the development of digital communication – adds the industrialist Fermo – which will bring us a world of new consumers, which we have not yet reached: they will in fact, together with strong creative innovation, bring us the growth we expect, when the markets normalize ".
WHAT THEY SAY IN THE MARCHE
It is not clear at the moment whether the drastic contraction in Tod's sales will have consequences on the employment level. For now, the Casette d'Ete company, which had also opened a production site in Arquata del Tronto in the middle of the post-earthquake period, is not unbalanced, notes the Marche newspaper: "But to recover the losses accumulated in recent months , and after an already not particularly favorable period – with a significant drop in share prices on the Milan Stock Exchange – it will certainly take a long time ”.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/tods-come-piangono-i-conti-di-della-valle/ on Wed, 09 Sep 2020 04:47:36 +0000.