Report
Loic Morvan

Luxury Goods Italian groups should again underperform peers in H1

Tod’s Group and Salvatore Ferragamo will release their H1 results during the first week of August and we are quite cautious. Actually, both groups should report poor sales performance with market share losses, implying ongoing margin dilution. These moves lead us to adjust our 2018-2020 earnings for both groups, respectively by 5% and 4.5%. We remain Sell on Tod’s Group (FV EUR58 vs EUR61) and Neutral on Salvatore Ferragamo (FV EUR21 vs EUR22). We are not yet convinced by the ability of both groups to undertake the current transition and strategic issues in the coming months. Nevertheless, most of others luxury players are expected to report much more dynamic figures in H1 2018 both at top line and profitability and therefore we keep our Buy recommendation on LVMH and on Hermès.
Underlyings
Salvatore Ferragamo S.p.A.

Salvatore Ferragamo creates, produces and sales goods for men and women: footwear, leather goods, apparel, silk goods, jewels, other accessories and fragrances. as well as eyewear and watches manufactured under license by third parties. Co. sells its products through: a network of single Salvatore Ferragamo brand stores, managed both directly and by third parties; and presence in department stores and multibrand specialty stores. Co.'s fragrances product category involves the creation, development and production of fragrances and related products under the Salvatore Ferragamo brand. Co. is also active in the licensing of the Salvatore Ferragamo brand and in real estate management.

TOD'S S.p.A.

Tod's operates in the luxury sector under its proprietary brands (TOD'S, HOGAN and FAY) and licensed brands (ROGERVIVIER). Co. creates, produces and distributes shoes, leather goods and accessories, and apparel. The TOD'S brand is known for shoes and luxury leather goods. The HOGAN brand is known for shoe collections for women, men and children, and also crafts various leather goods items. FAY is a brand with a focus on casual wear. ROGERVIVIER brand includes shoes, handbags, small leather goods, jewelry and sunglasses.

Provider
Bryan Garnier
Bryan Garnier

Since 1996, Bryan, Garnier & Co has been growing with an absolute conviction that the investment banking landscape would experience a major revolution: most of the large local generalist banking groups will disappear to the benefit of a handful of global powerhouses, and an emerging group of independent, highly specialised boutique investment banks.

Analysts
Loic Morvan

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