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RAPAPORT... Profits for Charles & Colvard Ltd., creator of moissanite, more than halved during the second quarter of 2007 as sales were affected by a weak overall jewelry market the company concluded.
Net income stood at $529,000 for the quarter, representing a 52 percent decline compared with April through June 2006. Sales fell 11 percent to $7.6 million.
"Our second quarter sales results reflect a number of factors, including a weak overall jewelry retail environment,” said Bob Thomas, Charles & Colvard's president and chief executive officer.
Thomas explained that sales of moissanite jewels to the company’s top four direct customers, representing 71 percent of total sales, were down 18 percent in the second quarter. Sales to the remaining direct customers were up 14 percent over the same period last year, he noted.
The North Carolina-based company said it expects sales trends to strengthen in the second half of 2007 as retailers accelerate their rollout for the holiday season. Despite this, Charles & Colvard lowered its annual revenue expectations to between $35 million and $38 million, from its prior prediction of $45 million to $48 million. The lower forecast resulted partly from a delay in its chain-wide rollout at retailer Sears Holdings Corp., which was scheduled for the second half of 2007, the company stated.
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