MILAN — Hurt by a slowdown in Europe, Marcolin SpA registered an 8.5 percent drop in net profits in the first quarter to 7.3 million euros, or $9.5 million, compared with 7.9 million euros, or $11 million, in the same period last year.
Revenues edged down 0.6 percent to 63.5 million euros, or $83.2 million, compared with 64 million euros, or $89.6 million, last year.
Dollar amounts have been converted at average exchange rates for the periods to which they refer.
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Chief executive officer and general manager Giovanni Zoppas said first-quarter results were in line with expectations. “We are very satisfied with the sales performance in the group’s strategic areas of the Far East and America, where our fashion and luxury brands have high potential,” said Zoppas. “Our target for the current year is to keep up the excellent results obtained last year.”
The Italian eyewear maker produces collections for brands including Roberto Cavalli, Tom Ford, Kenneth Cole, DSquared2, Tod’s and Hogan. Earlier this week, Marcolin finalized a five-year licensing agreement with Balenciaga, whose first collection will bow in 2013.
The fashion and luxury collections “performed well,” said the company, and so did the Diesel line, which is part of the diffusion segment. Marcolin pointed to a slowdown in sales of the Ferrari collection, whose licensing agreement has expired, and for the John Galliano line.
In the first quarter, sales in Europe shrank 15.8 percent to 30.9 million euros, or $40.4 million, accounting for 48.6 percent of total revenues. Sales were hurt by the slow economies in Italy, Portugal, Spain and Greece.
Revenues in Asia gained 32.3 percent, lifted by growth in Hong Kong, China and Korea, and accounted for 13.5 percent of sales, representing a strategic market with potential, said the firm. For this reason, Marcolin continues to invest in the region to “strengthen its sales structure and expand its distribution network.”
The U.S. showed 20.9 growth, accounting for 23.2 percent of sales. Business in the rest of the world gained 8.9 percent, with strong increases in the United Arab Emirates and Australia, representing 14.7 percent of total sales.
Earnings before interest, taxes, depreciation and amortization fell 8.8 percent to 11.8 million euros, or $15.4 million, while operating profits dropped 9.7 percent to 10.6 million euros, or $13.8 million. The lower margins were affected by the group’s increase in advertising, which rose 14 percent compared with the first quarter in 2011.
“Moreover, although the sales were substantially consistent with those of first quarter 2011, they absorbed less of the guaranteed minimum royalties due under the licensing agreements,” said the company.
As of March 31, net debt stood at 8.2 million euros, or $10.7 million, compared with 18.2 million euros, or $25.4 million, at the end of March last year “thanks to the constant monitoring of net working capital.”
Marcolin shares on Wednesday closed down 0.97 percent at 3.68 euros, or $ 4.80 at current exchange.