Compagnie Financiere Richemont AG (Z.CFR) of Geneva, Switzerland, the world’s second-biggest luxury company, Thursday reported a drop in full-year net profit to EUR642 million ($762 million), from EUR826 million ($980.5 million) a year ago, the Dow Jones news service reports.

Net profit was below market expectations of EUR696.8 million.

Operating profit for the financial year ended March 31 fell to EUR259 million ($307.4 million) from EUR482 million ($572.1 million), hit by declining consumers’ confidence and a slump in global travel.

The company reportedly said the first two months of 2003 were poor, adding it was very hard to predict further development.

Chairman Johann Rupert reportedly said the company must cut costs further.

Rupert reportedly said the company had been too slow to adapt after years of good business.

JCK