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RAPAPORT... Net profits at luxury retailer Bulgari fell 8.8 percent to EUR 31.4 million ($48.9 million) in the second quarter of 2008 brought down by higher operating costs, a slump in its watch sales and very weak performance the America’s region. Second quarter revenues grew 4.8 percent to EUR 274.7 million ($427.6 million.)
Jewelry revenues grew 5.2 percent to EUR 118.3 million ($184.14 million,) while revenues from watches fell 11 percent to EUR 65.6 million ($102.11 million,) accessories rose 2.1 percent to EUR 20 million ($31.13 million) and ‘other’ fell 8.4 percent to EUR 1.8 million ($2.8 million.)
All Bulgari’s geographic locations except the America’s saw revenues increase.
Revenues in Europe grew 11.7 percent to EUR 108.9 million, though its home market Italy fell 4.5 percent to $32.6 million. Revenues in the America’s fell 21 percent to EUR 38.5 million, while in Asia rose 10 percent to EUR 109.5 million, including a 6.7 percent increase in Japan, and the Middle East grew 10.6 percent to EUR 17.8 million.
Earnings before interest and taxation fell 20 percent to EUR 29 million ($45.14 million) in the second quarter.
For the first half of 2008, Bulgari revenues rose 4 percent to EUR 506.4 million ($788.24 million.) Net profits for the period declined 7.1 percent to EUR 54.2 million ($84.36 million.)
Bulgari CEO, Francesco Trapani, said he was particularly pleased with the performance of the company’s jewelry segment, which stood out among its product categories.
"In the half year just ended which was characterized by a strongly unsettled macroeconomic environment, Bulgari has once again shown the indisputable strength of its brand and the power of its creativity in all of its product categories,” he said.
Trapani nevertheless limited Bulgari’s growth forecast for the second half of the year due to continued difficult macroeconomic conditions.
“[Given these conditions,] I believe that it is both reasonable and prudent to restrict the range of the increase in our revenues, operating profit and net profit to the lower band of the guidance already given to the market," Trapani said.
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