Lazare Kaplan Shifts to Profit in Fiscal Year End

Lazare Kaplan International (LKI) shifted to a net profit of $7 million for the fiscal year ended May 2008 from a loss of $0.2 million the year before though net sales for the year dropped.

Net sales for the fourth quarter and fiscal year ended May 31, 2008 declined to $369.7 million and $94.4 million, respectively, from $434.4 million and $96.9 million for the comparable prior year periods, the company said in a statement released on Tuesday.

LKI noted that the decrease in sales for the quarter and year primarily reflects a reduction in sales from rough diamond trading operations offset in part by increased polished sales of both branded and fine cut commercial diamonds.

The company, a Diamond Trading Company (DTC) sight holder, expects that the slowdown in U.S. economic activity, the credit crunch and more conservative consumer spending will seriously affect the diamond and diamond jewelry business in coming months as demand is largely driven by discretionary spending.

“Though new markets have opened in other parts of the world, the U.S. remains the major demand driver, and we anticipate that the international markets will also be affected by the economic slowdown. Thus, a cautionary note is in order at this time,” LKI said in the statement.

The company was late in publishing the earnings results.