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Leibish & Co

Friday, November 12, 2010

Bulgari 3Q Sales Up 15%, Jewelry Sales Up 14%, Watch Sales Down 11%

Italian luxury jeweler Bulgari SpA said Thursday that third quarter sales increased 15 percent year-over-year to 267.9 million euros ($366.7 million). At constant exchange rates (excluding currency fluctuations and other conditions) sales rose 5 percent for the period, ended Sept. 30.

Net profit for the period increased 138 percent year-over-year to 16.6 million euros ($22.7 million) for the Rome-based company.

Third-quarter jewelry sales rose 13.7 percent year-over-year (24.2% at constant exchange rates) due to the excellent sales performance of its B.zero1 line and the Serpenti collection. Watch sales fell 10.9 percent (down 1.8 percent at constant exchange rates). However, the company said it was not a fair comparison since delivery of new products this year began in September and continued in the three subsequent months, while last year the new launches were available starting in the second quarter. In October, watch sales grew by 6 percent. The company said that the women’s Serpenti watch collection had an “excellent reaction.” The steel version was available in stores in September, followed by the gold version at the end of October. 

The company also said October wholesale sales were greater than what was recorded in directly owned stores, which confirms the recovery of this distribution channel after last year's massive de-stocking. The company noted that the new Bulgari Roth and Genta models unveiled this year in Basel were “remarkably well-received by customers in directly owned stores.”

Perfume sales fell 4.1 percent for the period. (3.5% at constant exchange rates) but began to rise again in October, recording an increase of 5 percent. Accessories sales increased 35.3 percent (54.8 percent at constant exchange rates).

Sales in Europe for the third quarter rose 11 percent year-over-year, with sales in Italy up 24.4 percent. Sales in America fell 7.4 percent. The sales trend in America, however, adjusted to take into account the normal volatility of high-end jewelry, recorded a growth of 6.4 percent. In Asia, Japan sales show continued weakness, down 1.1 percent, while the rest of Asia grew 15.4 percent for the period. In China, sales grew 24.3 percent for the period. Sales in the Middle East and other areas fell 1.5 percent. However, this is an improvement compared to second quarter sales decline of 10.8 percent.

“I am satisfied with the third quarter results—particularly with the excellent performance of jewelry and accessories and the notable improvement in profitability—which are in line with our plans and clearly show that the company is continuing to improve, both in terms of product and image and in terms of investment control, indebtedness, inventory and costs,” said Francesco Trapani, Bulgari Group CEO.

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