Italian luxury fashion group Tod’s saw a remarkable surge in its shares, rising more than 12% on Wednesday. This boost came as the company reported its first increase in annual sales since 2015. Revenues for the luxury leather goods maker jumped nearly 40% to 883.8 million euros ($997 million) last year, driven by strong growth in Europe and the United States during the fourth quarter. While these figures fell slightly short of pre-pandemic levels, they surpassed analysts’ average forecast of 842 million euros, as per a company-provided poll.
The positive sales results position Tod’s to report positive earnings before interest and tax (EBIT) for the fiscal year 2021. Chief Executive Diego Della Valle expressed his pleasant surprise at this outcome, particularly considering analysts’ consensus forecast of a 6 million euro loss in 2021. Moreover, it indicates that the company achieved higher profitability in the latter half of the year compared to 2019 levels. This is a significant achievement considering the severe impact of the COVID-19 pandemic on Tod’s, as it experienced a staggering decline of almost 33% in revenue in 2020, making it one of the worst-performing companies in the luxury industry.
The resurgence in luxury fashion sales can be attributed to consumers indulging in high-end purchases after enduring the confinement of the pandemic. Several luxury groups have emerged strongly from the crisis, and Tod’s seems to be one of them. The company is set to release its full results on March 10, which will provide a more comprehensive overview of its performance.
At 1106 GMT on Wednesday, Tod’s shares had risen by 12.63%, surpassing Italy’s all-share index, which recorded a 2.2% increase. This substantial increase in share price reflects investors’ optimism about the company’s future prospects following its long-awaited sales growth. Tod’s is now poised to capitalize on these positive results and continue its journey towards further recovery and success in the luxury fashion market.
Useful Links:
1. Tod’s Official Website
2. Reuters
