MILAN — Weak sporting goods sales helped push down Benetton’s first-half revenue, even as cost-cutting boosted net profit.
This story first appeared in the September 13, 2002 issue of WWD. Subscribe Today.
The retailer also made bearish forecasts for flat sales in the full year and “moderate” growth in net profit.
Net profit for the six months ended June 30 rose 10.6 percent to $58.5 million from $52.9 million the year earlier. First-half revenue fell 4 percent to $982.5 million from $1.02 billion the year before. Dollar figures have been converted from the euro at current exchange rates.
Benetton said that figure also rose on improved efficiencies and better margins at its money-losing sports unit.
The company did not break down results for the unit specifically but a spokesman said it is “losing a lot less” than in previous years.
Benetton has said the sports unit, which owns the Rollerblade and Killer Loop brands, will break even in 2003.
The company said revenue at the sports unit dropped by about $21.5 million, as expected.
Benetton also noted that it sold off some manufacturing assets, which had previously generated $9.8 million in sales for the group, in the first part of the year.
First-half operating profit fell 3.9 percent to $132.2 million from $137.5 million, but lower financing costs and other expenses bolstered bottom-line numbers.
“For the full year, given the negative trend of consumer spending on an international scale, we expect revenue to be in line with those of 2001 and moderate growth in net profit,” the company said in a statement.