Bulgari Falls in Milan Trading After Quarterly Profit Misses Estimates
Bulgari SpA, the world’s third- largest jeweler, fell as much as 3.6 percent in Milan after reporting second-quarter profit that missed estimates and that it may not meet its full-year gross-margin forecast.
The shares fell as much as 30 cents to 5.99 euros and traded at 6 euros at 9:37 a.m., giving the Rome-based company a market value of 1.81 billion euros ($2.4 billion.)
Bulgari, which is introducing more lower-priced jewelry and more expensive men’s watches, is taking longer than peers to recover from the recession as retailers continue clearing inventories. LVMH Moet Hennessy Louis Vuitton SA, the world’s largest maker of luxury goods, said July 27 that second-quarter sales at its watch and jewelry unit increased 24 percent.
“We fail to find attraction in the shares at this level,” Thomas Chauvet, an analyst at Citigroup in London, wrote in a note today. “Bulgari’s historical average operating margins of 15 percent are unlikely to be recovered by 2012.” Chauvet maintained his “sell” rating on the stock.
Net income was 600,000 euros compared with a loss of 11.2 million euros a year earlier, the company said after markets closed yesterday. The average estimate of 10 analysts surveyed by Bloomberg was for 7.7 million euros. Bulgari may not reach its 63 percent-gross margin forecast because of rising gold prices and its geographic mix, Chief Executive Officer Francesco Trapani said in an interview yesterday. The margin was 61.1 percent in the second quarter.
To contact the reporter on this story: Armorel Kenna in Milan at akenna@bloomberg.net.
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