Bulgari Q3 Net Profits Down By 7.6%

Italian luxury jeweler Bulgari recently announced third quarter gross turnover of €218.1 million ($258.4 million), an increase of 8.1 percent at comparable exchange rates compared to the same period of last year. However, net profit was down to €26.3 million ($31.16 million) compared to €28.5 million ($33.77 million) in 2004.

From July to September the jewelry segment, the core business of the company, registered a sales increase of 7.3 percent, compared to the similar 2004 quarter. The watch segment registered a slight 1.3 percent dip. It should be noted that during the third quarter of last year, the company registered a 23.6 percent jump in watch sales.

Perfumes continued to register a strong growth of 19.4 percent, with the contribution of all the fragrances and in particular of the men’s fragrance Aqva. Accessories also continued to experience strong growth of 22.2 percent in the quarter and 30.0 percent in the first nine months.  

Worldwide sales increased, except for the Far East, which registered a decrease of 16.2 percent, due to a general weakness of the market.

Gross profit increased from €127.6 million ($151.2 million) in 2004 to €140.6 ($166.6 million), showing a gross margin increase from 62.8 percent to 64.5 percent, despite an unfavorable product mix and the rise in prices of the main raw materials, especially gold.

Francesco Trapani, CEO of Bulgari, commented: “The sales performance of the third quarter presented today confirmed the positive trend in the segment of jewelry and perfumes already registered in the past six months. Accessories continued their extraordinary increase so consolidating as an important strategic asset for the Group which decided to invest more aggressively in this sector with new and ambitious projects."

With sales of watches substantially stable in the last nine months, Trapani, believes that results will improve considerable during the last part of the year, which, along with a good sales performance during the holiday season, could increase Bulgari's 2005 turnover by more than 10 percent.

Bulgari, which last year signed a diamond supply agreement with Israeli diamond dealer Lev Leviev, aims to diversify in the accessories sector and become one of the world's top 10 brands in that business within the next five years. Bulgari plans to open its first store fully dedicated to accessories in Osaka, Japan at the end of November.