Rise In Harry Winston Q1 Sales, Yet to Return to Profit

Diamond miner and retailer Harry Winston Diamonds reported rough diamond sales dropped 15 percent to $48.9 million in the first quarter while retail sales rose 25 percent to $65.1 million. The company ended the quarter with a loss of $8.7 million, compared to a $45.1 million loss in the prior year.

The decrease in rough diamond sales resulted from a decrease in the volume of sales, the company said. The decrease was partially a result of a 12 percent decrease in production, mostly due to a planned lower volume of mined ore. The company produced 625,000 carats in the first quarter.

IDEX Online understands that some regular clients have declined rough diamond purchases during the quarter, possibly due to high asking prices. Excluding the carryover of the 0.4 million carats from the prior quarter, the price per carat nearly doubled, increasing 98 percent compared with the first quarter of the prior year.

Total sales of $114 million for the first quarter resulted in a 45 percent increase in gross margin and earnings from operations of $1.4 million, compared to a loss from operations of $10.1 million in the comparable quarter of the prior year.

Harry Winston was also hurt by the weakening U.S. dollar, suffering from a net foreign exchange loss of $11.8 million compared to a net foreign exchange loss of $5.8 million in the comparable quarter of the prior year.