Signet Sales and Same Store Sales Up Nearly 11%

Kay Jewelers is a top performer for Signet.

Signet Jewelers Ltd., the world’s largest specialty retailer of fine jewelry, said Tuesday that third quarter sales increased 10.7 percent, year-over-year, to $710.5 million, led by a 10.6 percent increase in same store sales. Income before taxes for the period, ended October 29, was $42.1 million, up from $12 million for the third quarter of the prior year.

“Our sustained positive performance is due to the excellent execution of our strategies by our team,’ said Mike Barnes, CEO of the Bermuda-based company, which is listed on the NYST. “We are pleased with the start of the fourth quarter, and with the majority of our sales ahead of us.”

The company, which operates approximately 1,860 retail jewelry stores in the U.S. and U.K., was led by the strength of U.S. operations, while its U.K. business sales were slightly down or flat, year-over-year.

The company’s U.S. division, which consists of about 1,324 stores and accounts for about 80 of annual sales, reported a 13.3 percent increase in sales for the quarter to $563 million. Same store sales increased by 13.9 percent compared to a rise of 9.7 percent for the same period of the prior year.

Its Kay brand reported a 13.8 percent increase in sales for the period to $314.3 million while same store sales rose by 13 percent.

Its higher end Jared brand reported an 18.4 increase in sales to $194.6 million with an 18.3 percent increase in same store sales. Jared average unit selling price and same store sales were favorably impacted by approximately $76 and 8.3 percent, respectively, as a result of a one-time watch promotion.

The company also operates several regional brands in the U.S., which in total reported a loss of 3.9 percent to $54.1 million. Same store sales increased 4.3 percent for the period.

Signet’s U.K. division, which consists of about 536 stores and accounts for about 20 percent of annual sales, reported a 1.9 percent increase in sales to $147.5 million. At constant exchange rates, sales were down 1.2 percent. Same store sales were down 0.5 percent, compared to a decline of 0.6 percent in the third quarter of Fiscal 2011.

Its H.Samuel brand reported a 3 percent increase in sales (0.2 percent at constant exchange rates) to 78.3 million for the period. Same store sales were flat.

Its Ernest Jones brand reported a loss of 0.6 percent (down 2.4 percent at constant exchange rates) to $69.2 million. Same store sales were down 1.1 percent for the period.

Richemont’s Half-Year Sales Up 29%, led by Asian Demand and Jewelry and Watch Sales

Luxury goods conglomerate, Cie. Financiere Richemont SA, said Friday that sales for the six-month period, ended September 30, increased by 29 percent to 4.2 billion euros ($4.68 billion), year-over-year. At constant exchange rates (stripping out the effects of currency exchange rates), the increase was 36 percent.

The Swiss company reported solid growth across all segments, regions and channels. Operating profit increased by 41 percent to 1 07 billion euros ($1.2 billion). Net income for the period increased by 10 percent to 709 million euros ($791.3), reflecting the impact of a one-time gain in the comparative period.

Richemont owns several leading luxury goods companies, which it calls Maisons, with particular strengths in jewelry, luxury watches and writing instruments. These companies include Cartier, Van Cleef & Arpels, Piaget, Vacheron Constantin, Jaeger-LeCoultre, IWC, Panerai and Montblanc.

“Our Maisons were able to benefit from a favorable trading environment to enhance their positions in jewelry, watchmaking and accessories,” said Johann Rupert, Richemont, executive chairman and CEO. “The rate of increase in net profit was lower than the increase in operating profit primarily due to a one-off gain in the comparable period.”

Rupert also noted that the group’s net cash position is 2.6 billion euros ($2.9 billion) and that sales in month of October, not included in the report, increased 28 percent, year-over-year. Sales were strengthened by the group’s own retail network bolstered by very strong demand in the Asia-Pacific and Americas regions.

Although gross profit rose by 26 percent, gross margin percentage was 160 basis points lower at 63.2 percent of sales, due to adverse currency movements affecting sales, the strengthening of the Swiss franc and, as expected, the impact of Net-a-Porter, the online luxury goods retailer. The company’s brands raised prices in order to offset the strength of the Swiss franc during the period. The stronger Swiss franc is of particular importance to the cost of sales as the majority of the Group’s manufacturing facilities are located in Switzerland.

Compared with the group’s other brands, Net-a-Porter’s gross margin percentage is well below the average reflecting its distinct business model as an online retailer, Richemont said. Given its above-average sales growth, Net-a-Porter has a dilutive impact on the Group’s gross margin percentage.
 
Earnings per share increased by 11 percent for the period.
 
Double-digit organic growth was registered across all regions, including Russia and the Middle East. Travelers to Europe continue to be an important sales driver. All brands improved their performance in the region versus the comparative period.

Sales to the Asia-Pacific region increased 48 percent (60 percent at constant exchange rates) to 1.7 billion euros ($1.9 billion), led by China, which is now the company’s third strongest market, after Hong Kong and the U.S.

In Europe, sales increased 20 percent (22 percent at constant exchange rates) to 1.5 billion euros ($1.67).

Sales in the Americas grew by 23 percent (35 percent at constant exchange rates) to 602 million euros ($671.7), driven by significant High Jewelry sales, although business in general has been very encouraging, the company said.

Sales in Japan increased 9 percent (8 percent at constant exchange rates) to 380 million euros ($424 million), despite the dramatic events of last March. Van Cleef and Arpels and watches performed particularly well.
 
Directly operated boutiques and Net-a-Porter sales increased by 37 percent. This was well above the growth in wholesale sales and Richemont now generates 49 percent of its sales through its own retail network.

The growth in retail sales partly reflected the good performance of Net-a-Porter and the expansion of the Maisons’ network of boutiques to 919 stores. Openings during the period were primarily in high-growth markets such as China.
 
Jewelry sales grew by 34 percent to 2.16 billion euros ($2.4 billion). “Both Van Cleef & Arpels and Cartier performed exceptionally well,” Richemont said.

Watch sales increased 30 percent to 1.17 billion euros ($1.3 billion).  “All watch brands performed well worldwide, reflecting the strong demand for haute horlogerie,” Richemont said. “Despite higher input costs and the strength of the Swiss Franc, the contribution margin was 27 percent, reflecting the brand’s pricing power and operating leverage.”
 
Montblanc reported strong growth with a 10 percent increase to 334 million euros ($372.6 million), reflecting good demand for its range of watches and accessories particularly in the Asia-Pacific region.
 
Richemont’s fashion and accessories brands saw double-digit sales growth and more than tripled its profits to 23 million euros ($25.6 million). Alfred Dunhill and Chloé performed particularly well.
 
Net-a-Porter incurred losses during the period amounting to 22 million euros ($24.5 million), resulting from the amortization of intangibles and the costs associated with the continued expansion of its platforms in the U.K. and the U.S

Richemont Sales Up 21%, Profit Up 52%

Swiss luxury goods conglomerate, Compagnie Financière Richemont, said Friday that sales increased, year-over-year, for the first half of the fiscal year by 21 percent to €5.1 billion ($6.5 billion). By constant exchange rates sales grew 12 percent.

Profit for the period rose 52 percent to €1.08 billion ($1.37 billion); with operating profit up by 28 percent to €1.38 billion ($1.75 billion), benefiting from favorable currency movements, and gross profit up 24 percent to €3.31 billion ($4.2 billion). Operating margin gained 150 basis points to reach 27 percent.

The Geneva-based company cited “solid growth in all segments, regions and channels” along with favorable currency rates and Asian tourism in Europe for the strong performance.

Richemont owns many of the world’s best-known luxury brands (known as “maisons” by the company) including Cartier, Montblanc, Vacheron Constantin, Van Cleef & Arpels and Piaget. It also has wholesale businesses and owns the luxury retail website, Net-A-Porter.com. A list of its businesses can be found by following this link.

“The Group’s maisons benefited from favorable exchange rates effects, successful product launches as well as strong pricing power,” said Johann Rupert, Richemont executive chairman and CEO. “The increase in net profit was well above the prior period, reflecting both the growth in operating results and the non-recurrence of non-cash losses, which stemmed from the Swiss franc’s appreciation against the euro.”

He added, “Sales growth rates moderated, as evidenced by the October sales which grew by 12 percent at actual exchange rates. At constant exchange rates, they were 7 percent higher. Richemont is seeing good growth in Europe, supported by Asian tourism which is compensating for slower domestic Asia Pacific sales. Retail continued to lead wholesale, reflecting robust jewelry sales.”

Rupert did warn that sales and profits could slow as exchange rates will like be “less favorable” for the remainder of the fiscal year.

By region the company reported that sales in Europe accounted for 36 percent of overall sales as the region enjoyed good growth, with tourists driving the above-average increase. The highest growth rates were in the Maisons’ own boutiques in tourist destinations, including the Middle East. Europe’s reported a 23 percent growth in sales for the period to €1.85 billion ($2.35). At constant exchange rates, sales increased by 19 percent.

Asia Pacific remains the strongest region for Richemont but sales growth has slowed. The region accounted for 41 percent of the Group’s total, with Hong Kong and mainland China the two largest markets. “Sales growth in our maisons’ own boutiques in the region was well above the increase in sales to wholesale partners, partly reflecting the number of boutique openings in the last two years,” the company said. Asia reported a 22 percent growth in sales for the period to €2.1 billion ($2.67). At constant exchange rates, sales increased 9 percent.

After two years of what the company termed as “outstanding sales,” the Americas region reported that sales grew 16 percent to €698 million ($877 million). However, at constant exchange rates, growth was 4 percent. The region represented 14 percent of overall sales for Richemont.

Japan, which Richemont lists separately, saw what the company terms as “continued momentum” in sales in all retail segments. The struggling market saw its sales increase by 18 percent to €448 million ($570 million). At constant exchange rates the increase was 4 percent.

Its group of jewelry brands saw sales grow by 20 percent to €2.6 billion ($3.3 billion) with operating results of €958 ($1.21 billion), a 31 percent increase. Operating margin gained 280 basis points to reach 36.7 percent.

Meanwhile, its specialist watchmakers group reported that sales increased 25 percent to €1.46 billion ($1.85 billion) with operating results of €470 ($592 million), a 51 percent increase. Operating margin gained 560 basis points to reach 32.2 percent.

Montblanc, the German brand known for its luxury writing instruments but also manufactures and sells luxury leather goods, jewelry and watches, is listed separately by Richemont. It reported that its sales increased 10 percent to €368 million ($468 million) with operating results of €53 million ($67.3 million), a 2 percent decline. Operating margin lost 180 basis points to reach 14.4 percent. Richemont said that Montblanc doesn’t benefit much from sales in tourist destinations.

For its other businesses—which includes Richemont’s Fashion and Accessories businesses, Net-a-Porter and watch component manufacturing activities—results are as follows:

* Fashion & Accessories maisons saw double-digit sales growth and operating profits were in line with the prior period at €25 million.

* Sales growth at Net-a-Porter is “normalizing” but continues to exceed the Group’s average. Net-a-Porter reduced its losses during the period, but generated a positive operating cashflow.

* Losses at the Group’s watch component manufacturing facilities were in line with the comparative period.

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Hermès Q3 Sales Up 15.8% Led by Watch and Jewelry Sales

The cream rises to the top as the best luxury goods brands continue to report robust sales in a difficult economic climate.

Hermès reports that revenue in the third quarter increased 15.8 percent, year-over-year, to 683.2 million euros. Revenue rose by 18.2 percent at constant exchange rates (stripping out the effects exchange rate changes). Sales growth for the Group's own stores was up 19.1 percent at constant exchange rates for the period, despite of a high comparison basis.

The 174-year-old Parisian brand said watch sales rose 22.4 percent (24.9 percent at constant exchange rates) to 37.5 million euros. Under the ready-to-wear & fashion accessories category, which includes jewelry, sales rose 28.9 percent (32.4 percent at constant exchange rates) to 148.1 million euros for the period, ended September 30.

Sales in other product categories are as follows:

* Silk & Textiles, up 21 percent (24.1 percent at constant-exchange rates) to 76 million euros.

* Leathergoods & Saddlery, up 8 percent (10.3 percent at constant-exchange rates) to 319.5 million euros.

* Other Hermes Sectors, up 29.9 percent (32.2 percent at constant-exchange rates) to 25.6 million euros.

* Perfumes, up 11.2 percent (11.6 percent at constant-exchange rates) to 42.7 million euros.

* Tableware, up 15 percent (16.8 percent at constant-exchange rates) to 10.9 million euros.

* Other products (which include John Lobb shoes as well as production activities realized for third parties, such as textile printing, perfumes, tanning), up 22.5 percent (23.3 percent in constant exchange rates) to 22.9 million.

Sales among geographical regions are as follows:

* Americas rose 12.9 percent (21.8 percent at constant exchange rates) to 106.6 million euros.

* France rose 5.4 percent to 111.8 million euros.

* The rest of Europe rose 21.3 percent (20.2 percent at constant exchange rates) to 138.1 million euros.

* Japan rose 4.3 percent (3.2 percent at constant exchange rates) to 115.8 million euros.

* The rest of the Asian Pacific rose 28.9 percent (33.9 percent at constant exchange rates) to 201.9 million euros.

Because of its strong third-quarter showing the company increased its outlook for the year, saying it expects sales growth to be 15 to 16 percent at constant exchange rates.

“Meeting this target will be highly contingent on the business sectors' ability to meet stepped-up demand ahead of the year-end holiday season,” the company said.

Blue Nile Sales Up 0.8%

Diamond and fine jewelry Internet retailer Blue Nile, Inc. said Thursday that net sales for the third quarter rose 0.8 percent, year-over-year, to $67.5 million, led by non-engagement jewelry. The Seattle-based company said it expects strong sales growth in the fourth quarter.

Operating income for the company increased 9.8 percent to $4.2 million. Operating income represented 6.3 percent of net sales, compared to 5.8 percent a year ago. Net income increased 7.7 percent to $2.8 million.

Non-GAAP adjusted EBITDA for the quarter totaled $6.6 million, a record third quarter level. For the trailing twelve month period ended October 3, 2010, net cash provided by operating activities totaled $26.2 million and non-GAAP free cash flow totaled $24.3 million.

“We delivered record third quarter sales, operating income, non-GAAP adjusted EBITDA, and earnings per share in what remains a challenging consumer environment. During the quarter, sales trends were uneven and reflected consumer confidence levels, which were at historic lows,” said Diane Irvine, Blue Nile CEO. "Sales trends have improved in the current quarter, and we remain focused on providing an exceptional experience to our customers. Across the business, we are gearing up for our peak holiday season.”

The company said fourth quarter net sales are expected to be between $106 million and $115 million, representing a year-over-year growth of 3 percent to 12 percent compared to fourth quarter 2009.

Highlights for the third quarter, ended October 3, include:

* International sales grew 5.7 percent in the quarter to $9.3 million, representing a record 14 percent of total sales. Excluding the impact from foreign exchange rates, international sales increased 3.4 percent. The company reported strong sales growth in its Canada and Asia/Asia-Pacific markets, while sales were weak in the U.K. and Europe because of global economic concerns combined with weaker currencies compared to the U.S. dollar.

* Gross profit for the quarter totaled $14.6 million, compared to $14.8 million a year ago. As a percentage of sales, gross profit totaled 21.7 percent. Within product categories, sales growth was relatively stronger in non-engagement jewelry as compared to the diamond engagement category.

* Selling, general and administrative expenses for the quarter were $10.4 million, compared to $10.9 million in the previous year, representing 15.4 percent of sales, compared to 16.3 percent last year.

Jewelry and Watch Sales Sparkle for LVMH

LVMH Moët Hennessy Louis Vuitton, the world’s leading high quality products group, said revenue for the first nine months of 2011 rose 15 percent year-over-year to 16.3 billion euros ($22.3 billion). Organic revenue growth was 15 percent after the currency impact was compensated by the June 30 consolidation of Italian luxury jeweler, Bulgari, into the LVMH structure.

The third quarter continued the trend of strong growth evident since the start of the year, the Paris-based conglomerate said. The momentum continued in Asia, Europe and the United States, while Japan returned to growth over the period. In its outlook, the company said it expects the same revenue growth to continue till the end of the year.

The Watches & Jewelry division (which includes the brands TAG Heuer, Zenith and Hublot), while fifth among the company’s six business units in overall income, was the strongest performer for the nine-month period, recording a 76 percent revenue increase (26 percent organic growth) to 1.2 billion euros ($1.7 billion). The third quarter was marked by the public offer for the outstanding minority shares in Bulgari, which the company said, is performing well across all product categories. TAG Heuer enhanced its feminine product offering with a new jewelry extension to its Formula 1 line and has expanded its presence in Asia. Hublot continues the successful roll-out of the Classic Fusion collection. Driven by the excellent progress of its El Primero and Captain ranges, Zenith continues to demonstrate the strong appeal of its high quality chronographs. The other jewelry brands, Chaumet, Fred and De Beers continued their positive momentum through their own store network, the company said.

Results for its other businesses during the nine month-period are as follows:

Revenue for the Wines & Spirits group (which includes Moët & Chandon, Dom Pérignon, and Jas Hennessy & Co.) increased 7 percent (11% organic) to 2.3 billion euros ($3.2 billion), led by champagne and premium alcohol sales.

Fashion & Leather Goods group (which includes Louis Vuitton, Thomas Pink and Marc Jacobs) grew 13 percent (15% organic) to 6.2 billion euros ($8.5 billion).

Perfumes & Cosmetics group (Christian Dior, Guerlain and Parfums Givenchy) saw its sales rise 3 percent (10% organic) to $2.3 billion euros ($3.2 billion)for the period, led by the sustained growth of its flagship product lines.

Selective Retailing group (which includes DFS, Sephora and La Samaritaine) sales increased 18 percent (19% organic) to $4.3 billion ($5.9 billion), benefiting from the expansion of Asian tourism, which was particularly strong in Hong Kong and Macao.

Its businesses listed as “other activities,” recorded a slight loss.

Harry Winston Sales Up While Profits Decline

Harry Winston saw a 98% increase in retail sales.

Harry Winston Diamond Corp. saw its luxury retail sales nearly double along with a modest increase in rough diamond sales, but it wasn’t enough to lift profits for the Toronto-based company.

The company said Wednesday that second quarter consolidated sales increased 44.7 percent percent to 222.4 million year-over year, resulting in a 6 percent increase in gross margin to $72.2 million and an operating profit of $23.1 million, compared to an operating profit of $29.9 million in the comparable quarter of the prior year. Consolidated EBITDA was $43.8 million compared to $49.4 million in the comparable quarter of the prior year.

Despite the sales increase, net profits fell 23 percent to $10 million.

Harry Winston consists of two businesses. The first supplies rough diamonds to the global market from its 40 percent ownership interest in the Diavik Diamond Mine. The company, however, is internationally known for its second business as a premier diamond jeweler and luxury timepiece retailer with salons in key locations throughout the world, including New York, Paris, London, Beijing, Tokyo, Hong Kong and Beverly Hills.

The luxury brand segment reported a 98 percent increase in sales to $132.8 million for the period, year-over-year. At constant exchange rates, the increase was 81 percent. Included in the second quarter was $55.6 million of high-value transactions, which generally carry lower-than-average gross margins. Operating profit was $6.8 million for the quarter compared to $2.3 million in the same quarter of the prior year. EBITDA for the luxury brand segment was $10.1 million compared to $5.5 million in the comparable quarter of the prior year.

“Global retail demand, especially in the emerging economies such as China and India, has delivered both strong retail sales growth and strong rough diamond prices. Seeing through the effect of a small number of high-value, lower margin sales, our own jewelry and timepiece business shows solid growth in both sales and margin in the core bridal, timepiece and designed jewelry segments,” said Robert Gannicott, Harry Winston chairman and CEO.

Meanwhile, sales from its mining segment increased 3 percent to $89.6 million for the second quarter, year-over-year, resulting primarily from a 41 percent increase achieved in rough diamond prices, offset by a 27 percent decrease in volume of carats sold. The mining segment recorded operating profit of $16.3 million compared to $27.6 million in the comparable quarter of the prior year. EBITDA for the mining segment was $33.7 million compared to $44 million in the comparable quarter of the prior year.

“The market price increase in rough diamonds has more than compensated for two complete sales versus three in the comparable prior year quarter as well as the lower quality diamonds mined from the upper part of the current open pit,” Gannicott said

“Looking forward we continue to see strong global jewelry and timepiece demand from China while Japan and the Middle East improve and the U.S. remains subdued. On this basis we expect to continue to grow our own jewelry and timepiece business despite challenging economic conditions in the U.S. and Europe. Although we do not predict further near-term rough diamond market price increases we do see our own rough diamond sales price already improving.”

Richemont Reports Widespread Sales Growth Led by Jewelry Sales but Cautions on Future Profits

Cie. Financiere Richemont SA said Wednesday that sales for the five-month period ended August 31 increased 29 percent year-over-year, led by strong growth for all of its brands throughout all regions. At constant exchange rates, sales increased by 35 percent.

However, the company cautions that the rising Swiss franc and uncertain economic conditions make the remainder of the year difficult to predict. In a move to stop the surge of the Swiss franc against other currencies, the Swiss National Bank capped the franc’s rate against the euro at an exchange rate below 1.20 francs to help the country’s exports. The Swiss currency dropped more than 8 percent against the euro Tuesday. It is unclear whether the SNB’s decision played into Richemont’s outlook.

On a region-by-region basis, sales growth in Europe, the company’s largest market, was robust (up 21 percent), reflecting purchases made by local clients and tourists, the luxury goods company said. The Asia-Pacific region continues to lead the way with a 46 percent growth in sales for the period. This stems from sustained consumer confidence in that region and increased investment by the company in its brands (known as Maisons) and distribution networks. Sales growth in the Americas increased a notable 26 percent, year-over-year. Sales in Japan increased 7 percent, despite the aftermath of the natural disasters which struck that country in March.

Retail sales grew 37 percent due to the expansion of the Geneva-based company’s retail networks, particularly in the Asia-Pacific region, and strong growth at the e-commerce site, Net-A-Porter.

The company’s wholesale business increased 22 percent during the five-month period.
 
All brands enjoyed solid growth. Jewelry brands (Cartier and Van Cleef & Arpels) led the way with 34 percent growth in sales for the period. Sales at watch brands (Jaeger-LeCoultre, Piaget, IWC, Baume & Mercier, Vacheron Constantin, Officine Panerai, A. Lange & Söhne and Roger Dubuis) grew 28 percent for the period. Montblanc sales increased 10 percent. Sales in a category listed as “Other” (Alfred Dunhill, Chloé, Lancel and Net-A-Porter.Com as well as other smaller brands and watch component manufacturing activities for third parties) increased 24 percent.

The company is also in a joint venture with Ralph Lauren’s watch and jewelry business.

Richemont’s net cash position for the period is 2.6 billion euros ($3.6 billion).

Richemont expects its sales and operating profit for the first six months of this year to be significantly higher than the comparative period.

“Based on the strengthening of the Swiss Franc between March 2011 and today, the Group will incur a significant translation loss on its cash balances,” the company said in a statement. Further, the accounting gain recognized in the comparative period relating to the acquisition of Net-A-Porter of € 101 million will not re-occur. Accordingly, Richemont expects attributable profit to be broadly in line with the prior year despite a significantly higher operating profit.”

Johann Rupert, Richemont executive chairman and Group CEO, added: “The rest of the financial year is difficult to predict. The problems of fiscal deficits generally and Euro zone difficulties in particular are likely to act as a drag on business prospects for companies in the period ahead, especially if the growth markets are affected. To hope for a continuation of the current good trading levels in such circumstances may be over-optimistic. In addition, we must keep in mind the demanding comparative figures against which sales in the coming six months will be measured.

“Moreover, the impact of the Swiss franc’s appreciation against the euro and other major currencies obviously poses a challenge for all Swiss exporters. For Richemont, with a significant production base, our headquarters and many of our Maisons located in Switzerland, the stronger Swiss franc will continue to be negative for our cost of sales and operating expenses, maintaining negative pressure on our margins.”

Movado Watch Sales Increase 32% and Goes from Loss to Profit

The Movado Rockefeller Center store, the only Movado boutique left in the Movado Group's restructuring plan.

The Movado Group said Thursday that net sales of its watches in the second quarter of fiscal 2012 increased 32.6 percent, year-over-year, to $113.2 million. On a constant dollar basis, net sales increased 25.5 percent compared to the prior year period. Income from continuing operations was $4.4 million, compared to loss of $3.2 million during the same period of the prior year.

“Our brands continue to experience very strong customer and consumer demand,” Rick Cote, Movado president and COO, said in a conference call with investors and media. “We continue to experience pressure on our gross margins due to a devaluing U.S. dollar versus the Swiss franc as well as product cost pressures. However, we have been able to offset these impacts with strong sales growth and our disciplined expense management growth.”

Movado Group, Inc. designs, manufactures and internationally distributes watches through its brands: Movado, Concord, Ebel and ESQ by Movado. In addition, it has licensing agreements for produce watches under the Coach, Hugo Boss, Juicy Couture, Lacoste and Tommy Hilfiger brands. The company is headquartered in Paramus, N.J., and Bienne, Switzerland, and has a manufacturing facility in Switzerland.

The company is in the midst of a multiyear plan to improve its profitability. Last year, it closed its boutiques (except for its New York's Rockefeller Center store) and is now focusing on its Movado and licensed brands, offering new products and expanding into China.

So far it seems to be working as the company experienced its second consecutive quarter of growth following losses in 2009 and 2010. Cote said all Movado brands experienced strong growth, in particular its Movado brand and licensing brand division. The China market grew by more than 50 percent in the first half of the year.

“While we experienced broad-based sales growth across all of our brand categories, our results continue to be driven by particularly strong performances in Movado and licensed brands both domestically and internationally,” Efraim Grinberg, Movado chairman and CEO, said in a statement.

Net income for the quarter, ended July 31, was $4.4 million, compared to a net loss for the second quarter of fiscal 2011 of $20.9 million, including the results of discontinued operations of $17.7 million. Operating income increased to $5 million in the second quarter of fiscal 2012 compared to operating loss of $2.2 million for the same period last year. EBITDA increased to $8 million compared to EBITDA of $1.5 million in the second quarter of fiscal 2011.

The company also reiterated its prior guidance for fiscal 2012 and continues to anticipate that EBITDA will range between $31.5 million and $33.5 million for the year and that net income will be in the range of $15 million to $16.5 million.

Grinberg said during the conference call that he expects sales to be better than first anticipated but but gross margins will “not be as anticipated,” due to the imbalances between the Swiss franc and the U.S. dollar and rising manufacturing costs.

“I think the top line will be a little better than what our guidance had been but when we’re done we see that positive being offset by some of the gross margin negatives,” he said. “That’s why we still see the bottom line in the range that we have given previous guidance on. Sales will be at the upper echelon and a little bit better and the gross margin will not be where we had originally anticipated.”

Gross profit for the company was $60.9 million, or 53.8 percent of sales, compared to $44.4 million, or 52 percent of sales in the second quarter last year, primarily due to the leverage gained on fixed costs and a favorable shift in channel and product mix, the company said.

Operating expenses rose 20 percent to $9.3 million due to increased marketing expenses to drive sales, salary increases, the reinstatement of certain employee benefits and performance-based compensation, the company said. In addition, there was an increase due to unfavorable foreign currency exchange rates (again, referring primarily to the rates between the Swiss franc and the U.S. dollar).

US Sales Remain Strong At Signet Jewelers While UK Sales Disappoint

Signet Jewelers, the largest specialty retail jeweler in the US and the UK, said Thursday that second-quarter year-over-year sales increased 3.1 percent to $880.2 million. Same store sales for the period increased 3.6 percent year-over-year while eCommerce sales grew 7 percent to $31.2 million.

This was offset by a 1.2 percent decline in net income to $67.4 million. During a conference call Thursday, Mike Barnes, Signet CEO, said the decline was primarily due to the costs associated with the acquisition of the Ultra outlet jewelry store chain and the conversion of many of them to Zale Outlet stores, and lower gross margins compared to other Signet holdings. Without Ultra, earnings per share were up 5.9 percent.

In the company’s US division, which now accounts for nearly 85 percent of total sales for the company, sales increased 5.6 percent to $741.1 million. Same store sales increased 4.9 percent for the period. Sales increases were driven by strength in bridal, colored diamonds and watches. Signet owns 1,449 jewelry retail stores that operate under the brand-names Kay, Jared, Kay Outlet stores, Ultra and stores and some regional brands.

Kay and Jared experienced increases in both transaction counts and average transaction value. Meanwhile, eCommerce sales increased 36 percent to $25.3 million.

In the UK division, total sales declined 8.5 percent to $139.1 million in the second quarter. Same store sales decreased 2.4 percent. The company said the sales decline was primarily due to a same store sales decrease of $3.4 million, the impact of closed stores of $5.6 million and currency fluctuation of $3.9 million. Signet owns 500 retail stores that operate under the H.Samuel and Ernest Jones names.

The company said that at Ernest Jones, the number of transactions increased driven primarily by strength in branded bridal and watches, excluding Rolex, and the average transaction value was lower, primarily due to the impact from Rolex being offered in fewer stores. In H.Samuel, the number of transactions declined, primarily due to store closures and lower traffic. This resulted in lower sales across many merchandise categories, partly offset by strength in branded bridal products. Sales in both businesses were impacted by lower bead transactions. UK eCommerce sales in the UK increased 5.4 percent to $5.9 million, which include 45 percent coming to the websites through mobile devices, Barnes said.

Barnes noted during the conference call that Signet is in the process of updating its websites and mobile presence to take advantage of the increased traffic.

Other second quarter highlights:

* Gross margin declined, falling to $309.7 million or 35.2 percent of sales, compared to $311.2 million or 36.4 percent of sales in the second quarter fiscal 2013. The includes the results for Ultra increased gross margin dollars by $5.7 million; however, it reduced the consolidated gross margin rate by 50 basis points and the US gross margin rate by 70 basis points. The Ultra gross margin is lower than the core US business due to lower Ultra store productivity and the impact of the Ultra integration.

* Gross margin dollars in the US increased by $1.3 million compared to second quarter of fiscal 2013, reflecting higher sales offset by a gross margin decrease of 180 basis points. The company said the lower gross margin was primarily attributed to a gross merchandise margin decrease by 50 basis points, attributed to Ultra; and store occupancy and operating costs deleveraged by 70 basis points, of which 40 basis points was due to Ultra. The remaining 30 basis point change was due to the increase of new store openings.

* The US net bad debt ratio increased to 4.9 percent of sales compared to 4.5 percent of sales in prior year second quarter. The increase in the ratio was primarily due to the growth in the outstanding receivable balance. In addition, the US division experienced a “slight decline in collection efficiency” and a change in the credit mix. In the UK, gross margin dollars decreased $2.8 million, primarily reflecting the impact of decreased sales and currency fluctuation offset by a gross margin rate increase of 40 basis points.
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* Selling, general and administrative expenses increased 4.2 percent to $250.5 million. As a percentage of sales, SGA increased by 40 basis points to 28.5 percent. This includes the results for Ultra, which increased SGA by $13.5 million and increased the consolidated SGA rate by 70 basis points. The company said Ultra’s SGA is expected to decline as the final steps of the integration are completed.

* Operating income fell 4.9 percent to $105.5 million. Operating margin declined 100 basis points to 12 percent.

* The US division’s operating income including Ultra declined 4.9 percent to $111.5.

* Operating margin for the US division including Ultra was 15 percent, compared with 16.7 percent in fiscal 2013, down 170 basis points. Excluding Ultra, the US division’s operating income was $119.3 or 16.8 percent of sales, up 10 basis points.

In its guidance, the company said it expects same store sales to rise in the low-single digit for the third quarter.

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LJ International Revenue Up 26%, Profit Up 59%, Led by China Retail Business

The Enzo retail chain in China is a stellar performer for  LJ International.

Hong Kong-based jewelry manufacturer and retailer, LJ International Inc., reported Thursday that operating revenue in the second quarter increased 26 percent to $41.5 million. Gross profit increased 59 percent to $20.6 million. Operating income increased 13 percent to $3.3 million. Net income for the period ended June 30 rose 67 percent to $3.85 million.

It was the company’s retail division in China led the way showing exceptionally strong sales and offsetting a decline in its international wholesale business due the sluggish economy in the U.S. and Europe.

The company, which owns the Enzo store chain in China, reported that second quarter retail sales increased 70 percent year-over-year to $28.4 million. Same store sales for the period increased 61 percent for the period, ended June 30. Enzo added 16 new stores in the second and since then added another 12 stores to boost its branded retail chain to 166 stores. LJ International said it will continue to aggressively expand its retail network in China.

LJ International’s wholesale revenue fell 19 percent to $13.16 million year-over-year. Sales from the U.S. and Europe decreased 26 percent and 6 percent year-over-year, respectively, representing 71 percent and 20 percent of wholesale revenue. Meanwhile, sales from Asia and other markets grew 49 percent and represented 9 percent of wholesale revenue for the period. The company distributes a full complement of jewelry lines under the Lorenzo brand name to fine jewelers, department stores, national jewelry chains and electronic and specialty retailers in North America and Western Europe.

“Our solid financial performance came in ahead of our expectation, mainly driven by the stronger than expected performance of Enzo, the retail business arm targeting affordable luxury segment,” said Yu-Chuan Yih, LJ International chairman and CEO. “Consumer and luxury product markets are widely perceived to be two of the fastest growing sectors in the expanding Chinese economy. Enzo, with solid financial strengths, will continue to expand its retail network, deepening penetration in its affluent first and second tier city network while strengthening its presence in the third tier cities. We are well on track to operate a network of about 200 stores at the end of the year and have scheduled to add approximately 26 stores by the end of the third quarter, bringing the number to about 180 stores.”

Yu-Chuan Yih added, “Amid an intricate macro environment which impacts the wholesale markets, we remain a key partner of our long-standing wholesale customers, which has warranted stable sales throughout the economic cycle. We will focus on strengthening collaboration with core customers to better align product strategy and design with the changing preferences of the end consumers, to add value to our strong relationship with leading wholesale customers; and our high quality of products and services would continue to help us maintain a steady growth in the wholesale business amidst unfavorable market conditions.”

In its outlook the company said it expects a 19 percent to 25 percent increase in gross revenue, year-over-year, to $42.5 million and $44.5 million. This outlook is fueled by an expected 33 to 38 percent increase in retail sales in the range of $28 to $29 million for the period. Wholesale revenue is expected to be $14.5 million to $15.5 million, representing a flat growth rate to an increase of 6 percent for the period.

More financial highlights for the second quarter after the jump:

Gross profit margin in the second quarter 2011 was 50 percent, an expansion of 11 percentage points primarily due to the margin expansion of retail business.

Retail gross profit in the second quarter was up 97 percent year-over-year to $18.8 million. Retail gross profit margin in the second quarter was 66 percent, a year-over-year expansion of 9 percentage points. The increase in retail gross profit margin was primarily due to a more favorable sales mix, with more sales of colored gemstone items, the company said.

Wholesale gross profit in the second quarter fell 47 percent to $1. 7million. Wholesale gross profit margin in the second quarter fell 14 percent, down from 21 percent in the second quarter 2010. The decline in wholesale gross profit and gross profit margin was primarily due to a change of costing methodology.

Sales, general and administrative expenses in the second quarter 2011 increased 66 percent year-over-year to $10.2 million. As a percentage of operating revenue, SG&A expenses were 25 percent, compared to 19 percent in the second quarter 2010. The increase was primarily due to an increase in investment in marketing campaign and marketing team to support the continued strengthening of brand building.

Rental expenses in the second quarter 2011 increased 98 percent year-over-year to $6.1 million. As a percentage of operating revenue, rental expenses were 15 percent, compared to 9 percent in the second quarter 2010. The increase was primarily due to rental costs are mostly sales-linked and trended up as retail revenue saw a significant increase during the quarter. The increase was partly due to the increase in rental space as a result of expansion of retail network.

Depreciation in the second quarter 2011 was $960,000, up 101 percent year-over-year.

Operating expenses, including SG&A expenses, rental, net gain (loss) on derivatives and depreciation, increased 73 percent year-over-year to $17.2 million in the second quarter. As a percentage of operating revenue, operating expenses were 42 percent, compared with 30 percent in the second quarter 2010.

Operating income in the second quarter 2011 increased 13 percent year-over-year to $3.3 million.

Operating margin in the second quarter 2011 was 8 percent, compared to 9 percent in the same period 2010.

Operating income from retail business in the second quarter 2011 was US$4.4 million, up 106 percent year-over-year. Retail operating margin was 16 percent, compared to 13 percent in the second quarter 2010.

Operating loss from wholesale business in the second quarter 2011 was $660,000 compared to an operating income of $1.15 million in the second quarter 2010. The operating loss from wholesale business in the second quarter was impacted by the reduced revenue caused by change in sales return provision and a reduced gross profit caused by revised inventory valuation.

Net other revenue in the second quarter 2011 amounted to $1.24 million, compared to an expense of US$0.20 million in the second quarter 2010.

Income tax expenses in the second quarter 2011 were $740,000, compared to $450,000 in the second quarter 2010, mainly due to a smaller amount of tax benefits for retail business during the period.

Net income from operating businesses and excluding non-recurring items and derivative gain from warrants is forecast to be in the range of $3.5 million to $4 million, a 9 percent to 25 percent year-over-year increase.

Tiffany Still Riding High, Reports Strong Growth in all Regions, Raises Earnings Forecast

Tiffany & Co. said Friday that worldwide net sales in the second quarter increased 30 percent year-over-year to $872.7 million due to strong growth in all geographic regions. Excluding the effect of translating foreign-currency-denominated sales into U.S. dollars, worldwide net sales increased 24 percent and comparable store sales rose 22 percent.

The luxury retail jeweler said net earnings increased 33 percent for the period ended July 31 to $90 million and, excluding nonrecurring charges, rose 58 percent in the quarter. Management increased its earnings forecast for fiscal 2011 to reflect the better-than-expected second quarter results.

“We are extremely pleased by these results which confirm the growing global appeal of Tiffany's product offerings,” said Michael J. Kowalski, Tiffany chairman and CEO. “In addition, we have been able to absorb precious metal and gemstone cost increases while improving our gross and operating margins.”

Net sales by region:

* In the Americas, second quarter sales rose 25 percent to $438.2 million, Tiffany said. On a constant-exchange-rate basis, total sales rose 24 percent and same store sales increased 23 percent. Sales in the New York flagship store increased 41 percent in the second quarter due to strong foreign tourist demand. Same store sales in the Americas increased 19 percent and Internet and catalog sales in the Americas increased 16 percent.

* In Asia-Pacific, second quarter sales increased 55 percent to $173.2 million in the second quarter. On a constant-exchange-rate basis, sales increased 45 percent same store sales increased 41 percent, due to growth in most countries with the largest increase in the greater China region.

* In Japan, second quarter sales rose 21 percent to $142.5 million. On a constant-exchange-rate basis, total sales increased 8 percent due to same store sales growth of 8 percent.

* In Europe, sales increased 32 percent to $101.3 million in the second quarter. On a constant-exchange-rate basis, sales increased 17 percent and same store sales rose 11 percent, reflecting growth in most countries.

* Other sales rose 46 percent to $17.4 million in the second quarter, due to increased wholesale sales of finished products to independent distributors within emerging markets, partly offset in the first half by a decline in wholesale sales of rough diamonds.

Other financial highlights in the second quarter:

* Gross margin (gross profit as a percentage of net sales) was 59 percent, compared with 57.8 percent for the same period of the prior year. The increases were due to sales leverage on fixed costs.

* SG&A (selling, general and administrative) expenses rose 37 percent in the second quarter, which included nonrecurring costs of $34 million in the second quarter, versus $4 million in both of the prior-year periods, related to the relocation of Tiffany's New York headquarters staff to 200 Fifth Avenue. Excluding the nonrecurring costs, SG&A expenses rose 26 percent for the period, reflecting higher store occupancy, staffing, marketing and sales-related variable costs.

* The effective income tax rate was 31.2 percent in the quarter versus 34 percent for the same period last year, with the decline primarily due to a reversal of a valuation allowance against certain deferred tax assets.

* At July 31, 2011, cash and cash equivalents and short-term investments totaled $565.2 million versus $614.7 million last year. Total short-term and long-term debt represented 29% of stockholders' equity compared with 40% a year ago.

* Net inventories at July 31 were 18 percent above the prior year. The increase was planned to support sales growth, store openings, product introductions and expanded assortments, and higher product and raw material acquisition costs. Almost one-fourth of the increase resulted from the effect of translating stronger foreign currencies into U.S. dollars.

* Tiffany said it repurchased approximately 330,000 shares of its common stock in the second quarter at a total cost of $24.5 million, or an average cost of $74.29 per share. In the first half, it spent $52.5 million to repurchase approximately 783,000 shares at an average cost of $67.00 per share. At July 31, approximately $340 million remained available for future repurchases under the currently authorized plan, which expires January 2013.

In its outlook, Tiffany said it is increasing its full year earnings forecast to $3.65 - $3.75 per diluted share (not including nonrecurring expenses) from the previous forecast of $3.45 - $3.55 per diluted share due to the better-than-expected second quarter results.

“Despite continuing economic uncertainty, our strong first half performance gives us ample reason to remain confident about our prospects for the balance of the year,” Kowalski said. “We are encouraged that total worldwide sales growth in the third quarter-to-date is continuing to exceed our expectations due to noteworthy strength in the Americas, Asia-Pacific and Japan, demonstrating, once again, the attraction of the Tiffany & Co. brand.”

Tiffany operates 236 stores (98 in the Americas, 55 in Japan, 52 in Asia-Pacific and 31 in Europe), versus 223 a year ago (91 in the Americas, 57 in Japan, 48 in Asia-Pacific and 27 in Europe).

Pandora Jewelry Q2 Revenue Up 53%

Pandora charm bracelet

Danish jewelry company, Pandora, continues its comeback that began to show promise earlier this year with a year-over-year 53 percent increase in revenue to 1.9 billion kroner ($343 million) for the second quarter of 2013. Net income rose 22 percent for the period to 431 million kroner ($76.5 million).

The company did note that comparable figures for the second quarter of 2012 were impacted by the company’s stock balancing campaign conducted in 2012, where it replaced unwanted products after demand collapsed two years ago.

The international company known for its charm jewelry and silver jewelry posted robust double-digit sales growth in all regions where it operates:

• Americas increased by 52.1 percent (54.3% increase in local currency)
• US increased 53.9 percent (55.6% increase in local currency)
• Europe increased by 59.3 percent (59.8% increase in local currency)
• Asia Pacific increased by 43.5 percent (42.4% increase in local currency)

Gross profit for the quarter increased 49 percent to 1.27 billion Danish kroner ($225 million). This corresponds to a gross margin of 66 percent, compared to 67.9 percent in the second quarter of 2012 and 65.6 percent in the first quarter of 2013. The company said the decrease in gross margin was primarily due to the expiration of the suspension of import duties on goods from Thailand (where the company manufactures its jewelry) into the U.S. “The increase in the gross margin compared to Q1 2013, was due to a decrease in commodity prices,” the company said.

EBITDA for the second quarter increased by 140.9 percent to 530 million Danish kroner ($94.1 million) resulting in an EBITDA margin of 27.4 percent, compared to 17.5 percent in the same period of the prior year. 

Pandora—which designs, manufacturers, markets and sells its jewelry wholesale and retail—said its volumes increased by 40 percent year-over-year and the average sales price increased nearly 9 percent.

On 30 July 2013, Pandora is sticking to an upgrade in its financial guidance, first announced July 30, to 8 billion kroner ($1.42 billion), compared with its previous guidance of 7.2 billion kroner and expects an EBITDA margin of approximately 27 percent, up two points from its previous guidance.

The company also plans to increase the number of its popular “concept stores” that it plans to open for the year, from 150 to 175.

“The solid performance reported for Q1 2013 has continued across all major markets in the second quarter, with strong sales from newly launched products, high replenishment rates and healthy sell-out from the concept stores,” said Allan Leighton, Pandora CEO. “Our strategy of delivering affordable luxury is becoming increasingly relevant, and although there are still many areas in which we can improve we are pleased with our progress.”

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Blue Nile Q2 Sales Up 5.1%, Net Income Up 1.3%

Online diamond and jewelry retailer, Blue Nile, Inc., reported Thursday that net sales increased 5.1 percent, year-over-year, to $80.5 million, a record second quarter sales level. Net income totaled $2.8 million, up 1.3 percent.

Despite the growth in revenue, increasing diamond and precious metals prices as well as weak consumer sentiment has had a negative impact on sales, particularly in its traditional bridal jewelry market. Growth for the period came from “non-engagement” jewelry, such as less-expensive colored-gemstone jewelry, and international sales, which grew 40.7 percent to 12.8 million, Diane Irvine, Blue Nile CEO said Thursday during a conference call with investors and the press. The Asia-Pacific region grew 100 percent to $5 million. Excluding the impact from changes in foreign exchange rates, international sales increased 29.7 percent.

Diamond prices increased 20 percent during the past year, Irvine said. Round diamonds experienced the largest price hike, rising 40-percent since last year. As an example, Irvine said a 1-ct. round diamond which cost $6,000 a year ago costs $9,000 today.

“While we delivered record second quarter sales and non-GAAP adjusted EBITDA, our results were impacted by rapidly rising diamond and metal prices amid a weakening consumer environment in the U.S.,” Irvine said in a statement. “Despite these external headwinds, we achieved sales growth across all product categories, including double-digit sales growth in the non-engagement category. We also experienced strong growth in our international business. In addition, we generated higher gross margins for the quarter and achieved our earnings per share stated guidance while investing in marketing and our international business.”

Operating income for the period, ended July 3, totaled $4.3 million, representing an operating margin of 5.3 percent of net sales.
Non-GAAP adjusted EBITDA for the period, ended July 3, totaled $6.9 million. For the trailing 12-month period, ended July 3, net cash provided by operating activities totaled $33.4 million compared to $24.1 million, year-over-year. For the same trailing 12-month period, non-GAAP free cash flow totaled $28.7 million.

Gross profit for the quarter grew 6 percent to $17.2 million. As a percentage of net sales, gross profit was 21.3 percent compared to 21.1 percent for the second quarter of 2010.

In its outlook, Blue Nile says that it expects net sales to be between $71.5 million and $74 million for the third quarter, ending October 2. Irvine, said during the conference call, noting the company is being cautious in its forecast because of rising prices and weak consumer sentiment. She added that the third quarter is usually the slowest month for bridal jewelry because there are no holidays during this period. But also said it is the period where the company’s margins are often the highest.

Pandora Q2 Sales Down in Key Markets, Downgrades Outlook, CEO Resigns, Company Blames Price Increases and Poor Execution

Has the bubble burst for Pandora? The Danish company known for its charm jewelry announced the sudden resignation of its CEO, Mikkel Vendelin Olesen, effective immediately due to lower-than-expected growth, which the company blames on commodity price increases and “inadequate” execution.

“Although our price increases combined with some destocking are significant contributors to our slowdown in sales and profitability, our own inadequate operational sales, and marketing execution is as big a factor,” said Allan Leighton, Pandora board chairman.

Marcello Bottoli was named the interim CEO as the company, which experienced spectacular growth in recent years and a $2 billion IPO in October, 2010, seeks a permanent replacement.

“The re-set of our affordable luxury positioning, improved operational execution and restoring growth trajectory is now the focus of our company,” Pandora said in the same statement. “This re-set will take up to 18 months to see through. In addition, the company has instigated a strategic review to test or confirm certain elements of the company strategy.”

The announcement came following the early release of a condensed second quarter earnings report Tuesday that contained negative growth rates in its biggest markets and a downgraded outlook. The financial report was scheduled to be released August 16. No reason was given for the early release and the full report will still be issued on the expected date.

The company changed its outlook from expecting a revenue growth of no less than 30 percent for 2011 and an EBITDA margin of minimum 40 percent to 0 revenues and EBITDA margins in the low thirties for the year.

After the release of the financial report, Pandora stock fell a spectacular 65 percent, according to news reports.

Pandora reported that revenue increased 3.6 percent to 1.4 billion Danish kroner ($265.3 million). In the Americas, revenue increased 16.2 percent. However, sales in the U.S., its largest market, fell by 0.7 percent. The U.S. accounted for 39.2 percent of all sales during the period for Pandora.

In Europe it was even worse as sales declined 11.9 percent. The U.K. and Germany, its two largest markets in Europe, fell 13.1 percent and 20.1 percent, respectively. The U.K. accounted for 11.9 percent of all sales, down from 14.2 percent in the second quarter of 2010. Germany accounted for 8.5 percent total group sales, down from 11.1 percent in the second quarter of 2010.

The Asia-Pacific region increased 7.6 percent for the period. However, in Australia (another large market for Pandora), revenue was down 14.6 percent.

The company implemented price increases in all markets during the first quarter except in Australia where it increased prices in April 2011. Price increases in Germany were implemented at the end of first quarter. “Our price increases introduced during H1 2011 have had a significant negative impact on our volumes in the quarter,” the company said.

Other financial highlights include:

• EBITDA decreased by 6.2 percent to 512 million kroner ($97 million) resulting in an EBITDA margin of 36.8 percent compared to an EBITDA margin of 40.7 percent for the second quarter of 2010.

• EBIT decreased by 8.3 percent to 440 million kroner ($84 million) resulting in an EBIT margin of 31.6 percent compared to a EBIT margin of 35.7 percent in Q2 2010

• Reported net profit increased by 56.1 percent to 626 million kroner ($119.3 million), compared to a net profit of DKK 401 million kroner ($76.4 million) in the second quarter of 2010. Adjusted for revaluation of the CWE earn-out provision based on revised outlook for PANDORA CWE, second quarter net profit decreased by 17.7 percent to 330 million kroner ($62.9 million).

Bulgari First Half 2011 Sales Up 23%

First half 2011 sales for the Bulgari Group increased 23.6 percent, year-over-year, at current exchange rates to 548 million euro ($784 million). At comparable exchange rates the increase was 23.3 percent. The luxury jewelry house reported an operating profit of 15.3 million euro ($21.8) and a net profit of 9.1 million euro ($13 million) for the period.

During the first six months of the year, all product categories contributed to the growth, the Rome-based company said. Jewelry sales increased 20.2 percent at current exchange rates to 243 million euro ($347.6 million) due to the strong sales of its B.zero1, its high-jewelry line; a new ceramics collections; and Sassi, its medium-high end collection.

Watch sales grew 26 percent for the period to 111.1 million euro ($159 million), led by the “excellent results” of its women’s watch, Serpenti, and its complicated men’s models, including new versions of its Octo model.

Perfume and cosmetics sales increased 27 percent to 129.7 million euro ($185.5) for the period, led by the new launches of Mon Jasmin Noir and MAN. Accessories segment sales grew by 24.2 percent.

All geographical areas “performed exceedingly well” for the first-half 2011 period, the company said. Sales in Europe grew 18.6 percent (Italy increased 11.1 percent), the Americas were up 16.1 percent and Japan increased 4.6 percent. Sales for the rest of Asia grew by 44.2 led by a 59.5 percent growth in sales in mainland China. Sales in the Middle East and other areas increased 34.3 percent.

In March, Bulgari announced that Paris-based luxury conglomerate, LVMH, acquired a majority stake in the company. The two companies are in the process of working through the legal and logistical hurdles to bring Bulgari into the LVMH group.

Record Sales at Swatch Group, but Strong Swiss Franc Cuts Margins

Watch and jewelry sales at the Swatch Group rose 24 percent at constant exchange rates to 2.9 billion Swiss francs ($3.6 billion) for the first half of 2011. At current exchange rates the increase was 13.3 percent for the six-month period. Total sales increased 24.2 percent at constant exchange rates to a record $3.36 billion Swiss francs ($4.17 billion). At current exchange rates the increase was 13.3 percent.

The Biel/Bienne-based company owns 19 watch and jewelry brands and also produces watch components and electronics, has its own distribution network, its own retail stores and owns and manages museums for some of its better-known watch brands.

“This very positive growth spanned all major regions and all price segments. Key contributory factors included not only a combination of strong brands and expansion of the distribution and retail network, but also the Production segment, which increased its gross sales by a massive +28.5% at constant rates,” the company, which owns 19 brands, said in a statement.

The company, as shown by the growth difference between constant and current exchange rates, has been hampered by the Swiss franc which has gained 31 percent in value against the U.S. dollar. The company said the impact of the rising currency amounted to a loss of 387 million Swiss francs ($481.4 million) or 12.8 percent.

“The overvalued Swiss franc reduces margins at the Group’s foreign distribution companies, while the high volatility makes exchange-rate related price adjustments difficult,” the company said. “The strength and volatility of the Swiss franc have to be considered as extremely problematic for Switzerland.”

Its operating profit for the first-half of 2011 increased 20.8 percent to a record $756 million Swiss francs ($940.5 million), with an operating margin of 23.7 percent. Net income increased 24.5 percent to 579 million Swiss francs ($720.3 million), representing 18.2 of net sales for the first half of 2011.