MILAN — A good product mix, a positive performance at retail and favorable exchange rates helped Benetton Group SpA post a 9.9 percent rise in net profits in the first quarter to 20 million euros, or $27.6 million, from 18 million euros, or $23.4 million, in the same period the previous year.
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Benetton said sales in the period ended March 31 advanced 1.8 percent to 457 million euros, or $630.6 million, from 449 million euros, or $583.7 million, last year. The Italian apparel manufacturer said product categories with higher unit values and “satisfactory sales growth in directly operated stores,” among other factors, contributed to the boost in revenues.
While orders for spring showed a small decline compared with those for the same season the previous year, Benetton said the children’s line registered the best results.
The group said that, although the global economy is showing encouraging indications, “signs of instability remain, however, in the markets of greatest relevance to the group, particularly in Europe.”
The company reported growth in emerging markets such as India, in particular. “Having achieved a good presence in all the major cities in the country, the group now aims to open new stores also in second- and third-tier cities,” Benetton said. Russia was also singled out as delivering growth. Benetton has completed a “refocusing” of stores in China, which also showed growth, as did Mexico.
A company reorganization helped cut costs and post a 43.1 percent growth in operating profit to 35 million euros, or $48.3 million, compared with 25 million euros, or $32.5 million the previous year.
Dollar figures are converted at average exchange rates for the periods to which they refer.
Investments in the quarter were halved to 25 million euros, or $34.5 million, but Benetton said it expects “investments in commercial locations of strategic interest” to accelerate during the rest of the year.
As of March 31, net debt stood at 589 million euros, or $812.8 million, compared with 763 million euros, or $991.9 million, at the end of March 2009.