MILAN, March 11 (Reuters) - Italian luxury goods company Tod’s reported on Monday a bigger-than-expected 26 percent drop in 2018 core profit, hit by a sharp acceleration in marketing expenses and higher costs to strengthen its design teams.
The company, known for its loafer shoes, said its full-year earnings before interest, taxes, depreciation and amortization (EBITDA) fell to 118.3 million euros ($132.93 million). That was below an analyst consensus of 125 million euros, according to Refinitiv data.
“FY 2018 results reflect the industrial plan underway and the strategic decision to invest significant financial resources to support future revenue growth,” Chief Executive Diego Della Valle, who is the company’s main shareholder, said in a statement.
He said collections now in stores were getting a “very positive” response from customers.
He launched a new business model dubbed “Tod’s Factory” in late 2017 to reverse falling sales and refresh its namesake brand, offering new products and more frequent collections.
Although the new strategy has been slow to bear fruit, Della Valle said on Monday he was confident of meeting the group’s target for higher efficiency and revenue growth, without specifying a timeframe.
$1 = 0.8899 euros Reporting by Claudia Cristoferi; Editing by Susan Fenton