Italian luxury group Tod’s has reported higher-than-expected core profits for the year 2019, despite the ongoing investments made to support sales and the uncertain impact of the coronavirus outbreak. The renowned company, well-known for its iconic loafer shoes, announced that its full-year earnings before interest, taxes, depreciation, and amortization (EBITDA) had increased to €255 million ($284.68 million), a significant jump from €118 million the previous year. Although the revenue declined slightly for the fourth consecutive year, there was a positive improvement in the last quarter, indicating that the group’s brand relaunch strategy was yielding positive results. In addition to this impressive performance, Tod’s has also revealed its plan to pay a dividend of €0.6 per share, compared to €1 per share in the previous year.
However, amidst these positive figures, the luxury industry is now facing a major setback with a significant decrease in sales due to the global coronavirus epidemic. Originating in China, the virus has quickly spread to various countries, with Italy being the hardest-hit nation in Europe. This epidemic has put a strain on businesses worldwide, including Tod’s, and is expected to have a profound impact on its sales and operations in the coming months.
In a Reuters poll, it was revealed that Tod’s reached an adjusted core profit of €150 million, exceeding the average analyst estimate of €59 million. This unexpected success showcases the company’s ability to navigate challenging market conditions and emerge prosperous. However, it remains to be seen how the coronavirus outbreak will ultimately affect Tod’s and the luxury industry as a whole.
As the situation continues to unfold, it is crucial for Tod’s and other luxury brands to closely monitor the developments and assess the potential long-term effects. Adaptability and agility will be key in mitigating the impact of the epidemic and maintaining the stability of the business. Tod’s, like many others in the industry, may need to devise new strategies and initiatives to remain resilient during this global crisis.