Adverse currency exchange rates coupled with a drop in revenue from Benetton’s now disposed sports equipment division cut into the company’s first-half sales and profits.
For the six months ended June 30, Benetton said its net income dropped 16.6 percent to $55.9 million.
Dollar figures have been converted from the euro at current exchange as Benetton reported profits of 50 million euros.
Profit before extraordinary and one-time items — including a payment to the Italian government to take advantage of a tax break — reached $81.7 million, or 73 million euros, 17.8 percent above last year’s first half.
Total revenue slipped 3.1 percent to $1.08 billion, or 969 million euros, from $1.11 billion, or 1 billion euros, last year. Excluding year-ago revenue from the sports division and negative currency effects, Benetton said net sales would have been in line with last year. In the past year Benetton has successfully shed all the brands that were once part of its unprofitable sports unit.
Despite cost-cutting efforts, operating profits in the first half dipped slightly to $145.3 million, or 130 million euros, from $150.9 million, or 135 million euros, a year ago. Benetton’s board of directors approved a proposal that calls for a decentralization of operations into dedicated units. The board also approved creation of a new executive committee made up of chairman Luciano Benetton, managing director Silvano Cassano and directors Alessandro Benetton and Gianni Mion.
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