Italian luxury shoe maker Tod’s sees analysts’ expectations for 2022 sales and profitability as achievable despite a marked slowdown in China due to widespread Covid-19 restrictions, its finance chief said.

The company said 30 percent of its stores in China are closed and online deliveries have stopped because its distribution hub is in Shanghai, where heavy restrictions have been in place since mid-March.

Chief financial officer Emilio Macellari said that a 40 percent sales decline in the second quarter in the country — a key market for luxury groups — was a possibility, but it would depend on how long the curbs last.

However, the group is confident it can meet analyst expectations for the full year. It cited actions such as limiting or cancelling advertising and marketing spending in affected areas and a strong performance in Europe and the United States.

The analyst consensus is for 2022 sales of around 970 million euros and a 5 percent EBIT margin.

“Our expectations are in line with this consensus,” Macellari told analysts.

“All in all, the slowdown in China is of course visible but will not jeopardise the performance of the company for the full year.”

The group’s sales rose by 23 percent in the first quarter, extending a recovery that started last year and beating market expectations.

Revenues totalled 219.6 million euros ($231.68 million) in the period, driven by Europe and the Americas and coming in a touch above 2019 levels, before the pandemic hit.

Analysts had expected 212 million euros in sales, according to a consensus cited by broker Equita.

Tod’s, famous for its Gommino loafers, launched a new strategy in late 2017 to revamp its brands and lure younger consumers, but the pandemic hampered its efforts. Group sales bounced back by almost 40% last year, marking the first increase after five years of consecutive declines.

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