* Shares fall 7 pct, temporarily suspended
* Reports 2013 sales below expectations
* Five banks cut price target for the stock
(recasts, adds analyst quotes, detail)
MILAN, Jan 30 Italian luxury leather group Tod's
led losers on the Milan bourse on Thursday and its
shares were temporarily suspended from trading after 2013 sales
figures prompted analysts to question the company's strategy.
Tod's stock fell more than 7 percent to 102 euros after it
said late on Wednesday that it made 979.2 million euros ($1.34
billion) in 2013, against a Thomson Reuters SmartEstimate of
about 985 million euros.
Analysts at Barclays, JPMorgan, Nomura
and Societe Generale cut their price targets
for the stock to an average of 101 euros, flagging concerns over
the group's ability to branch out into products other than
Tod's makes about 76 percent of its revenue from shoes but
has had less success establishing itself as a producer of other
leather goods, such as bags, which generate higher margins
because they do not have to be made in so many sizes.
"The Tod's brand is struggling to resonate with consumers in
the leather goods (and) accessories categories," Nomura analyst
Christopher Walker said in a note.
Sales of leather goods, which Barclays analysts say provide
a margin 10 percentage points higher than that for shoes, fell
by 2.8 percent over 2013.
Tod's high reliance on Italy, where it makes more than a
third of its sales, has long been a concern for analysts, so a
slowdown in China and the United States later in the year
prompted further worries.
"The strategy of diversifying outside of Europe ... is
convincing, but implementation appears difficult," Societe
Generale analysts said in a note.
Tod's shares have fallen 15 percent since the end of last
year but are still valued more highly than those of its peers.
The stock trades at a multiple of more than 20 times forecast
earnings for the coming year, compared with a luxury sector
average of about 17 times.
"We believe the valuation looks stretched, considering
ongoing scope for further estimate downgrades. We therefore
remain cautious," Cantor Fitzgerald analyst Allegra Perry said.
($1 = 0.7329 euros)
(Reporting by Isla Binnie; Editing by David Goodman)