Tod's reaffirms analysts' expectations despite fall in H1 profits

Italian luxury goods maker Tod's said on Wednesday it confirmed full year market expectations, despite a fall in core profits and net income in the first six months of the year.

Core profit at Italian luxury goods maker was down 16 percent in the first half of the year with respect to 2015, bogged down by weak sales in Greater China and falling tourist spending in Europe and the United States.

The group has struggled in recent years as it sought to broaden the range of products offered and, like other companies in the luxury sector, it is now grappling with weaker spending in China and falling consumption by tourists.

"We are not, for the moment, modifying our position as far as consensus is concerned ... we do not see a reason to change the expectations," said Chief Financial Officer Emilio Macellari in a call with analysts on financial results.

The company said Macellari was referring to a consensus full-year revenue forecast by analysts of 1.019 billion euros, just marginally below the 1.020 billion euros generated last year.

In the first six months of the year, earnings before interest, tax, depreciation and amortization (EBITDA) fell by 16 per cent to 86.3 million euros ($97 million), just under analysts' forecasts of around 87 million euros, according to Thomson Reuters data.

Net income was down to 37.4 million euros, in line with analysts' estimates.

Sales in the first half of the year stood at 498 million euros, down 3.4 percent year-on-year, the group said in July.

The company's Tod's brand and its leather goods and accessories, suffered the most due to fewer purchases being made by tourists traveling to Europe and the United States.

Macellari explained that the group would not change its positioning on the market, despite the departure of Alessandra Facchinetti as creative director in May.

He said Tod's would focus on middle range of its core, well-known products, with bags priced between 1,400 and 1,500 euros, rather than on the higher-end of the range.

"Our focus is on that part of the offer that is closer to what is expected by our target clients, not on the high segment but on the medium one," said Macellari.

($1 = 0.8880 euros)