MILAN – Despite a 4.6 percent drop in first-quarter earnings, brought on by sales decreases in Italy and the United Kingdom and the weak dollar, Italian luxury group Bulgari SpA on Thursday confirmed its guidance for 2008, pending no further deterioration in macroeconomic conditions.
For the three months ended Mar. 31, net profits fell to 22.8 million euros, or $34.1 million at average exchange, which Bulgari chief executive officer Francesco Trapani said were “even higher” than company expectations and benefited from the positive effects of the hedging transactions on currency exchange rates.
Revenues for the quarter were “in line” with company forecasts, Trapani said, gaining 3 percent to 231.7 million euros, or $347 million – although they were “negative” in the U.K. and fell 14.8 percent in Italy and 8.9 percent in the Americas. Stripping out currency fluctuations, sales in the Americas gained 1.8 percent.
In a telephone interview with WWD, Trapani said following double-digit revenue growth in January and February, March was “bad for inexplicable reasons.”
However, “in light of [the better than expected results], of the outstanding orders recorded at the Basel [watch and jewelry] fair… and of the excellent performance in the emerging markets, I am confident in the sales trend for the forthcoming months and, in absence of a further deterioration of the economic environment, I can confirm the guidance for 2008,” Trapani said, adding that revenues had picked up in April.
Bulgari has forecast sales, operating profit and net profit increases of between 8 and 12 percent on a comparable exchange rate basis.