Safilo Net Slips in First Quarter

Weak consumer spending and the phasing out of the Giorgio Armani group licenses hurt Safilo Group SpA’s bottom line.

MILAN — Weak consumer spending in Europe and the phasing out of the Giorgio Armani group licenses hurt Safilo Group SpA’s bottom line in the first quarter ended March 31. The Italian eyewear maker said net profits dropped 34.9 percent to 12 million euros, or $15.7 million, from 18.4 million euros, or $25.7 million, in the same period the previous year.

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Revenues in the first three months of 2012 showed a 4 percent drop to 288.7 million euros, or $378.2 million, compared with 300.7 million euros, or $421 million, last year.

Dollar amounts have been converted at average exchange for the periods to which they refer.

Chief executive officer Roberto Vedovotto said first-quarter results were in line with expectations, touting the strength of Safilo’s brand portfolio, which includes Gucci, Dior, Balenciaga, Yves Saint Laurent, Bottega Veneta and Jimmy Choo. Vedovotto cited the global rollout of the group’s own Carrera brand, including its entry into China, and the worldwide launch of the new Celine collections among the strategic actions put in motion in the quarter.

He also underscored the value of the acquisition of Polaroid, which “represents a significant event in the marketplace, seizing a great opportunity to move way beyond the current industry focus of fashion-oriented products, by embedding high-quality lens expertise in the fast growing specialist and value-for-money segments.”

The company said that its top licenses consolidated their competitive positions in the major emerging markets, while Tommy Hilfiger, Boss Orange and Marc by Marc Jacobs kept expanding and strengthening in Europe.

Vedovotto concluded that, “despite the several challenges we are facing today, we are confident to reach our medium-term goals thanks to the strategic activities being implemented.”

Earnings before interest, taxes, depreciation and amortization dropped 20.7 percent to 32.3 million euros, or $42.3 million. Safilo’s operating profit in the first quarter decreased 26.4 percent to 23.1 million euros, or $30.2 million.

As of March 31, net debt stood at 243.2 million euros, or $318.6 million, compared with 268.2 million, or $375.4 million, at the end of March 2011.