NEW YORK (AP) â¿¿ Harry Winston Diamond Corp.'s fiscal second-quarter net income dropped 52 percent as the company said it held back some of its rough diamond inventory because it didn't want to sell them while prices are weak.
Harry Winston, which supplies rough diamonds through its minority ownership stake in the Diavik diamond mine, has struggled this year with volatile diamond prices and mixed demand for luxury items, due to global economic difficulties.
For the three months ended July 31, the Canadian company earned $4.8 million, or 6 cents per share. That's down from $10 million, or 12 cents per share, a year earlier.
Analysts predicted earnings of 14 cents per share, according to a FactSet survey.Revenue fell 21 percent to $176.9 million from $222.4 million as rough diamond sales declined 31 percent. Harry Winston sold about 0.43 million carats for an average price of $142 per carat during the quarter. This compares with a year earlier, when it sold approximately 0.57 million carats for an average price of $157 per carat. Sales for the luxury brand division, which sells diamond jewelry and high-end watches, fell 13 percent. The performance was hurt by lower sales in Europe and Asia, excluding Japan. Sales in America and Japan rose. The company said Thursday that it expects wealth creation in emerging markets and increased tourism to continue to drive increased demand for luxury jewelry and watches. It anticipates consumer loyalty for luxury products to remain strong over the long term. Shares of Harry Winston added 59 cents, or 4.8 percent, to $12.83 in midday trading as the broader markets rallied. The stock has traded in a 52-week range of $9.14 to $15.92.