Harry Winston reported that its luxury brand sales totaled $132.8 million in the second quarter, a 98 percent increase from last year. Its net profit dropped to $10 million compared with $17 million last year.
“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,” Robert Gannicott, chairman and CEO, said in a statement. “Looking forward we continue to see strong global jewelry and timepiece demand from China, while Japan and the Middle East improve, and the United States remains subdued.”
The company said in a statement that its results were impacted by a drop in its mining margins, in part because it is now mining underground, where costs are higher. In addition, many of its sales were in high-value items, which also have smaller margins.
Highlights of Harry Winston Diamond Corp.’s second quarter financial statement (ended July 31):
- Consolidated sales: $222.4 million, up 6%
- Mining sales: $89.6 million, up 3%
- Luxury brand sales: $132.8 million, up 98%
- Net profit: $10 million, down from $17 million last year
From the mining segment, a total of 0.72 million carats were produced, an increase of 11 percent. A total of 0.57 million carats were sold in this quarter versus 0.78 million carats sold in the second quarter of the prior year, mainly because of a sale that straddled the end of the quarter. The carats sold were smaller than the prior year owing to extra small diamonds from the processing of earlier plant rejects and lower quality ore from the upper section of the A-418 pipe. The company attributes the increase in mining sales to a 41 percent increase in achieved rough diamond prices during the quarter, offset by a 27 percent decrease in volume of carats sold.