Tods SpA: The Q4 is not Enough

Last January 22, we met the preliminary sales for the 2014 fiscal year of the Della Valle family footwear group, Tod´s. After a slow second half, the fourth quarter have camouflaged the Luxury Fermo´s footwear company´s bad 2014 results. In this way, the consolidated sales were 965,6 million euros in the 2014 fiscal year, facing the 967,5 million euros of the 2013 year, which represents a fall of the -0,20%. In Q4 2014, the sales raised up to 224,6 million euros, a 4,5% over the same period of the previous year.

By Brands:

• Tod´s, which represents the 58,82% of the total sales, obtained a billing of 568 million euros, that represents a fall of the -1,75% over the previous year, mainly due to, the misbehavior of the chinese market.
• Hogan, the Tod´s luxury casual brand, which represents the 22,00% of the total revenue, decreased their sales in a -2,12%, when billing 212,4 million euros. The results were positives on retail, although they didn´t work wholesale.
• Fay, The italian subsidiary brand directed by Tommaso Aquilano and Roberto Rimondi,which has a weigh of the 5,93% in the global billing, suffered a fall in their sales of the -0,52%, with a 57,3 million euros billing. The brand is starting the international expansion process.
• Roger Vivier, The recognized footwear and luxury accessories brand, which has a 13,14% of global weigh , obtained an increase of 11,61% in their sales, with a 126,9 million euros billing.

By Products:

• Footwear (77,01% of the sales),has increased their sales in a 0,53%, with a billing of 743,6 million euros, strengthening even more their leadership.
• Leather articles and accessories (16,11%), decreased its sales in a -3.29% , with a 155,6 million euros billing.
• Dresses (6,77%) entered 65,4 million euros , with a fall of -0,61% over the 2013 year. This status reflects the performance of the Fay brand.

By regions:

• Italy (32,23% of the total), Billed 311,2 million euros. A 3,65% less than the previous year.
• Great China (23,37%), Obtained a bad results, with a fall of the -4,97% and a 225,7 million euros billing, mainly due to the weak consumption environment (Commented in previous articles) of the continental China economy.
• Europe ex Italy (22,92%), Billed, with the german, UK and the spanish help , a 221,3 million euros billing, over the 2013 year.

• America (9,04%) decreased in a -3,32%, after obtaining a 87,3 million euros billing. The bad meteorological conditions at the start of the year and the temporary closure of the Madison Avenue (NY) shop, were the causes of this decline.
• Rest of the world (12,44%) Billed 120,1 million euros, with a growth of the 10,28% , driven by the great results of Corea, Japan and Singapur.

In brief, the good results of this last quarter, have padded a bad 2014 year. I worry about their exposition to the Chinese economy. With the fall of euro over the main currencies, we hope the 2015 year to be more conductive for this company.

Tecnical analysis of the value:

Looking to the weekly chart:

We can observe that after the break of 74,74 euros/action, the value has had a very positive behavior, with a first target of 88,94 already met. The trend indicators and the relative strength indicators are positive from a month and a half ago. Regarding Ichimoku, the cloud is located above the price range, making resistance around 95,00.

We can observe this better in the graph:

We can observe that after the break in the channel bass (red stroke), this lead us to plan uploads above the 97,36 euros/action. In the same way that in the weekly chart, the indicators reinforce this goal.

Our conclusion is that we are positives in the value, with the target price 97.36- 102.56. Only assignments below 79.20, would make us rethink our forecast upward. «Having dreams in our feet is starting to realize dreams», Roger Vivier.

Analysis: Miguel Angel Abad Chamon, Minister of Eurodeal Sociedad de Valores,AbadMaachamon.

Disclosure: This report is provided for information purposes. The opinions contained in it are based on information obtained from sources believed to solvents but we can not guarantee its accuracy and correctness. Our opinions are discharged at a given time and are subject to change over time. Eurodeal not accept any liability for losses to follow the recommendations expressed in this report.