Aug 29, 2008
Benetton's H1 profit flat, sees 6% year sales rise
Aug 29, 2008
MILAN, Aug 29 (Reuters) - Italian clothing retailer Benetton Group SpA said on Friday sales growth this year would be around 6 percent, the low end of medium-term goals, after reporting a 5.1 percent rise in turnover in the first half.
Benetton, best known for its colourful jumpers, said in a statement it still expected growth in earnings before interest, tax, depreciation and amortisation (EBITDA) of at least 7 percent this year, in line with a forecast made in May.
Its medium-term target for sales growth is 6-8 percent.
First-half net profit edged up to 72 million euros ($106.1 million) from 70 million.
The rise in first-half revenue came from shifting sales towards higher-value products and developing business in countries with high growth potential, Benetton said.
In addition, the euro's appreciation against, in particular, the dollar, the British pound and the South Korean won, helped.
Benetton said there were still uncertainties for the full year, stemming from "the unfavourable economic situation and the risks introduced by the increase in raw material prices and the acceleration of inflation in Asian countries".
Retailers worldwide are suffering as the global economy slows.
Benetton gets the bulk of its sales from Italy, where growth is virtually at a standstill, and the rest of western Europe.
In an effort to reduce its dependence on these markets, it is expanding in five key areas -- India, Turkey, the former Soviet Union, Latin America and China.
Shares in Benetton, which competes against Hennes & Mauritz and Inditex's Zara, were down 0.19 percent at 7.185 euros by 1205 GMT, when the DJ Stoxx European retail sector index was up 1.34 percent. (Reporting by Jo Winterbottom; Editing by Greg Mahlich)
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