MILAN — Cost-cutting at Bulgari boosted third-quarter profitability despite flat sales for the period while watch sales bounced back after double-digit declines in the past two quarters.
Net profit for the three months ended Sept. 30 rose 74 percent to $14.1 million from $8.1 million the year before. (Dollar figures have been converted from the euro at current exchange rates.)
Sales dropped slightly, by 0.7 percent, to $181.3 million from $182.3 million the year before. On a constant-currency basis they would have risen by 4 percent, Bulgari said.
Specifically, watch sales recuperated substantially in the quarter, up 11 percent, after falling 29 percent and 13 percent in the first and second quarters, respectively. Also helping growth were easy comparisons with the year-ago period, as watch sales in the third quarter of 2001 fell 17 percent.
As reported, Bulgari has a tough time competing with more established brands like Cartier and Patek Philippe in an already-depressed market for timepieces.
Chief executive Francesco Trapani said Bulgari was especially penalized in a weak market because other watch brands had more leverage with retailers. Although he declined to release current order figures, he expressed confidence that conditions are improving.
"The order book for watches is very strong," Trapani said. "Things are going in the right direction."
Elsewhere, jewelry sales fell by 7 percent and perfume sales decreased by 13 percent on strong comparisons with the year-ago period. Accessories also saw strong growth, rising 11 percent.
Worldwide, sales in Italy and the U.S. grew, 10 percent and 9 percent, respectively. Sales in the rest of Europe fell 17 percent, hurt by weakness in the German and French markets. Japan’s sales dipped 4 percent.
On another note, Trapani dismissed market speculation that Bulgari’s slumping stock price has made it a takeover target. He said potential investors have not contacted the Bulgari family, which controls the Rome-based jeweler.
"We have not received offers or even had mere contacts with interested buyers for some eight years," he said.
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