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Jan. 24, 2019, 4:12 a.m. EST

Tod's shares hit by drop in 2018 revenue

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By Pietro Lombardi

Shares in Tod's SpA (TOD.MI) sank in early trade Thursday, a day after the company reported a decline in sales for last year, citing growing economic and political uncertainty worldwide.

The Italian luxury leather-goods company said Wednesday that 2018 sales fell 0.5% to 958.2 million euros ($1.09 billion) at constant exchange rates.

Tod's shares traded 6% lower EUR40.76 at 0836 GMT.

"Despite it mentioning 'visible' results from recently launched initiatives, we cannot ignore that it has been guiding for--and failing to deliver--an H2-weighted rebound for more than two years," Berenberg analysts said in a note entitled "A perfect storm."

Chief Executive Diego Della Valle said the 2018 results were in line with the company's expectations, adding that it has "decided to allocate all the necessary resources" to support rapid growth.

"Consensus expectations continue to underestimate the magnitude of these investments," Berenberg said, adding that they should cause "significant margin pressure over the near term."

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