The luxury goods group, Richemont, has reported a 32 per cent fall in operating profits for the 2001/2 trading year.
Releasing its figures on Thursday, the Swiss company - which owns a portfolio of brand names including Cartier, Alfred Dunhill and Lancel - said its operating profit had slipped to €482 million (SFr709 million).
Net profit also fell by 15 per cent to €826 million over the same period.
In a statement to the press, the company blamed a "progressive slowdown in demand" for the slump in profit.
Richemont CEO, Johann Rupert, admitted the results were disappointing but said they could be partly explained by the group's decision to continue to invest in its manufacturing, distribution and support infrastructure.
"These developments inevitably generate costs, which the group is absorbing at a time when sales growth has levelled off," Rupert said.
Hilary Cook, the director of investment strategy at Barclays in London, told swissinfo it had "clearly been a very difficult year for Richemont".
Cook said the downturn in overseas travel following the September 11 terrorist attacks in the United States was one factor to blame for the fall in company profits.
"About 30 per cent of luxury goods sales are brought when people are travelling, so it has been very difficult for them," Cook told swissinfo.
"But in the long-term, luxury goods sales will continue to rise as a wealthier population spends more on these aspirational goods, so [Richemont] is a very good long-term investment," she added.
For the first time this year, Richemont's figures take into account sales from Jaeger-LeCoultre, IWC and A Lange & Söhne, three brands acquired by the company at the end of 2000.
Rupert announced that the company would continue to restructure its Swiss operations "to bring them onto a common platform", but said no redundancies were planned.
The group, which has until now been based in the Swiss city of Zug, also said on Thursday it planned to move its operations to Geneva.
"Geneva is home to a number of Richemont's businesses and the group thus already has a significant presence there," explained Rupert.
swissinfo with agencies