MILAN — Giorgio Armani saw rising first-half profits and revenue in the second quarter, but witnessed a slowdown in U.S. retail sales.
Earnings before interest and taxes for the six months ended June 30 rose 23 percent to 89 million euros, or $109.2 million at average exchange rates. Consolidated revenue advanced 5 percent, though Armani said that it would have risen 8 percent at constant exchange rates.
“In the first half of 2004 the Armani group has delivered an industry-leading performance with a notable increase in profitability against a background of solid growth in our brand and product categories and in all of our geographic operating regions,” Giorgio Armani, the company’s president and chief executive officer, said in a statement.
Direct store sales for the six months rose 7 percent, a slowdown from the 15 percent growth of the first quarter of the year. But an Armani spokesman said the U.S. market has rebounded, with sales rising 20 percent in the last week of September alone.
Armani’s earnings before interest, taxes, depreciation and amortization put on 14 percent to 122 million euros, or $149.7 million.
Excluding the U.S., Armani’s retail sales growth accelerated in the second quarter from the first in each of the company’s major markets. Revenue from directly operated stores in Europe grew 6 percent, while that from Japan rose 8 percent. China, a country Armani has earmarked for growth in store openings, saw its retail sales advance 47 percent.
On a brand basis, the signature Giorgio Armani brand’s retail sales advanced 10 percent, Emporio Armani sales grew 5 percent and Armani Collezioni sales advanced 4 percent.
Turning to the wholesale business, Armani said that spring-summer 2005 orders for Giorgio Armani and Emporio accessories gained 30 percent. Emporio watches and jewelry orders also grew 30 percent. Orders at Armani Casa rose 22 percent. Armani Jeans and Armani Collezioni orders advanced 11 percent and 7 percent, respectively.
Elsewhere, Armani said that it invested 17 million euros, $20.9 million during the half as part of its strategic plan. The company stated that it increased advertising and communications expenditures by 10 percent. Armani also said it opened 13 stores in the first six months of this year and renovated six existing stores.