MILAN — Currency fluctuations took a bite out of several Italian fashion and luxury goods companies’ first-quarter sales, prompting closer scrutiny of the bottom line. Tod’s, Marzotto and Benetton released Wednesday numbers for the three months ended March 31. Dollar figures have been converted at current exchange.
A weak dollar cut into Marzotto’s sales in the first quarter, but strong performances in its clothing division helped the Italian fashion and textile company increase its net profit.
Net profit jumped 37.5 percent to $26.1 million from $19 million the same period last year. Net consolidated sales dropped 2.6 percent to $629 million, or 530 million euros, from $645.6 million, or 544 million euros. However, the company said sales rose 6 percent, on an adjusted currency rate.
Marzotto reported net income of 22 million euros and sales of 530 million euros. While Marzotto’s cash cow, Hugo Boss, generated the majority of first-quarter sales, $423.7 million, its second largest fashion brand, Valentino, marked steady gains, as well.
Revenue at the Roman fashion house grew 15.4 percent to $53.4 million, or 45 million euros, from $46.3 million, or 39 million euros. On an adjusted currency rate, the company said sales swelled 20 percent in the first quarter compared with the same period last year.
A company spokesman added that orders for Valentino’s fall-winter 2004 collection were up more than 30 percent compared with fall-winter 2003.
Tod’s said its ongoing retail expansion and currency fluctuations hit profits in the quarter.
First-quarter net profit plunged 43 percent to $5.6 million. Sales grew 1.7 percent to $125.3 million, but Tod’s said they would have risen 4.7 percent at constant exchange rates.
Tod’s posted net profit of 4.8 million euros and sales of 105.6 million euros.
Tod’s also said sales figures were penalized, as it shifts more sales to its directly operated stores from the wholesale channel, because inventory moved through its own stores translates to revenue booked in the second quarter. On a geographic basis, Tod’s said sales in Italy, its biggest market, were flat, while those in the rest of Europe rose 1.3 percent. Revenue from North America dropped 7.6 percent and that from Asia grew 25.2 percent.
At Benetton, a lower tax burden pushed first-quarter net profit up 12.8 percent to $33.2 million. Operating profit dropped 15.9 percent to $53.4 million.
Benetton said last year’s sale of its sporting goods business, along with currency fluctuations, bit into first-quarter sales, which slipped 14.1 percent to $452.1 million. Benetton said revenue grew 1.4 percent, stripping out the effects of these two factors.
Net profit came in at 28 million euros, while sales were 381 million euros.
— Courtney Colavita and Amanda Kaiser