MILAN – Bulgari's net profit jumped 27 percent in the first quarter but the Italian jeweler said on Wednesday the deadly SARS (search) virus was hitting sales in Asia and could crimp its expansion plans.
Bulgari (search) said it made 11.4 million euros ($13.11 million) of net profit while operating profit nudged up one percent to 16.2 million euros, which Bulgari said was "essentially in line" with its plans.
Shares fell two percent to 4.40 euros in a flat market.
First-quarter revenues rose three percent, but excluding currency changes — the euro has risen sharply since the beginning of the year — sales would have grown nine percent.
U.S. sales fell 12 percent, but without the drop in the dollar they would have grown four percent, the company said. Jewelry sales, which make up 38 percent of total turnover, slipped one percent despite rising 17 percent in volume terms.
Chief Executive Francesco Trapani said last month Bulgari could miss its 2003 growth targets as sales dropped off in the wake of the SARS epidemic. Swiss rival Richemont has said SARS just compounded the problems of a weak global economy.
Trapani reiterated that SARS was hitting business in southeast Asia, the epicenter of the disease, and was also pinching travel sales which send its perfume sales nine percent lower.
"Unfortunately an immediate return to a stable and serene business environment — a fundamental premise for further expanding our activities — seems temporarily postponed due to the SARS effect," Trapani said in a statement.