Gucci cuts profit forecast

September 25, 2001 Posted: 0721 GMT

LONDON (CNN) -- Italian luxury goods maker Gucci Group cut its profit forecast for 2001 in the wake of terror attacks.

Gucci, the world's third-largest luxury goods group, joins it bigger rival France's LVMH Moet Hennessy Louis Vuitton in cutting it forecast after the attacks. Both are reliant on tourism for much of their sales.

"The tragic events of September 11 have clouded the global economic environment and trading conditions in the luxury goods industry," chief executive Domenico De Sole said.

Full-year net income per share will be in a range between $2.60 and $3, compared with the previous forecast of at least $3, the company said. Sales will be between $2.3 billion and $2.4 billion, compared with a forecast $2.45 billion.

LVMH, whose brands range from Givenchy and Kenzo in fashion to Louis Vuitton luggage and Moet & Chandon champagnes, expressed concerns that the terrorist attacks could hurt consumer confidence.

The fallout from the attacks has resulted in more than 100,000 job losses in the global airline industry as many international companies and tourists ditch plans to travel, amid fears mount of more possible hijackings. 

Gucci, which owns the Yves Saint Laurent, Sergio Rossi, Alexander McQueen and Stella McCartney brands, lowered its forecast as it reported a 2.5 percent rise in second-quarter profit to $83 million, or 82 cents a share. Sales rose 7.6 percent to $534.5 million.

Analysts polled by Reuters had forecast that net profit for the quarter ending July 31 would come in at $55.2 million and earnings per share at $0.54.

Gucci shares dropped 1.4 percent to 81 in early Amsterdam trading. On Monday, its stock soared more than 21 percent to 89.25 after Dutch regulators approved the bid by French retailer Pinault Printemps Redoute to take majority ownership of Gucci.

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