De'Longhi Net Falls 16.7 Percent in Q1
TREVISO, Italy-Rising expenses and a tepid sales performance led to a 16.7 percent downturn in De'Longhi's net income in the first quarter, to EUR18.9 million ($24.9 million).
The bottom line in the first quarter, which ended on March 31, was hurt by a 7 percent dollar gain in operating expenses, which boosted these costs as a percentage of sales 140 basis points to 25.3 percent. In addition, De'Longhi logged a 14.7 percent increase in non-industrial labor costs. Somewhat offsetting this effect, gross margin picked up 310 basis points to 50.1 percent.
Net sales edged up 0.9 percent to EUR320.5 million ($423.1 million). De'Longhi said sales were strongest for Kenwood-branded small electrics and hand blenders, and weakest for home comfort products.
The company added that sales of coffeemakers were mixed, with reduced promotional activity being the key factor.
De'Longhi said that looking ahead, it expects to perform in line with its internal growth and profitability targets for the remainder of 2013.