Lazare Kaplan Q1 Hurt by Falling Polished Diamond Sales
October 15, 06
Lazare Kaplan International (LKI) net sales in the first quarter of the fiscal year were $138.9 million, equaling net sales in the first quarter of previous year. The company said the results reflect a decrease in polished diamond sales offset by an increase in the sale of rough diamonds. LKI ended the quarter with a 1.8 million loss.
The Diamond Trading Company (DTC) Sightholder reported a $3.765 million rise in the cost of sales during the quarter. It closed the prior first quarter with a net income of $908,000.
Gross margin on net polished sales was 11.7 percent compared to 12.5 percent in the first quarter last year. The decline in polished gross margin percentage reflects a lower gross margin achieved on the sale of fine cut commercial diamonds partially offset by an increase in the gross margin achieved on the sale of branded diamonds, LKI explained.
Gross margin from the sale of rough diamonds 1.3 percent compared to 3.8 percent. “The decrease in rough gross margin percentage reflects increased rough costs and associated fees charged by diamond producers at a time of excess supply and soft demand from diamond manufacturers,” it said. Additionally, the decrease in rough gross margin reflects costs incurred by LKI in connection with the expansion of Angolan sourcing and trading operations.