Leading luxury goods maker Gucci Group NV on Thursday reported a less-than-expected 27 per cent fall in 2002 net profit from the year-ago period and said it was cautious about the Spring period due to a weak economy and the Iraq war.

The world's third largest luxury goods company and owner of the famous Yves Saint Laurent label said its net profit for the fiscal year to January 31 declined to 226.8 million euros from 312.5 million in 2001.

Group sales slipped 0.8 per cent year-on-year to 2.54 billion euros but sales at its core Gucci division slumped 9.6 per cent to 1.54 billion euros. It added its fourth quarter profit rose to 95.4 million euros from 93.8 million euros.

"We are cautious about the Spring period as we continue to see an uncertain environment with persistent volatility across the global markets worsened by the onset of war," chief executive, Domenico De Sole, said in a statement.

He added the company expects its Yves Saint Laurent brand to return to the black in 2005 after it posted an operating loss, not including cosmetics and fragrances, of 64.8 million euros compared to 76.2 million euros in the year prior.