Good share news and bad from Gucci
One bright spot in the gloom currently pervading the luxury goods sector was Gucci’s release last week of its results for the first half of the year.
Net profits for the six months ending July 31 came in at $139 million compared with analysts’ top end estimates of $130 million. They also compared favourably with the year-before figure of $128 million. And whereas analysts had been expecting net profits to fall by up to 32% in the second quarter, in fact they showed a slight gain of 2% to top $83 million.
Inevitably, however, the tragic events of September 11 and the uncertain economic outlook loomed large in the company’s predictions for the remainder of the year. Accordingly, Gucci said its fully diluted earnings per share figure for the full-year would be in the region of $2.60 to $3.00 a share, as opposed to the previous estimate of at least $3.00 a share. It also predicted a drop in full-year revenues to between $2.3 billion and $2.4 billion, instead of the forecast $2.45billion.
Nevertheless, the revisions were well below expectations and generally well received by analysts. Domenico De Sole, chief executive of Gucci, said: "Obviously the tragic events of September 11 have clouded the global economic environment and trading conditions in the luxury goods industry in particular.
"Although circumstances have obliged us to lower the revenue and profit forecast for the remainder of 2001, we remain confident in the outstanding medium and long-term potential for all our brands and will continue to work tirelessly to maximise their value for all our shareholders".
