UPDATE 1-Yoox sees sales and profit growth in 2014 as 1st-qtr sales rise

Wed May 7, 2014 3:57pm EDT

* Yoox expects growth in international sales and profits

* Investment in technology weighed on 1st-quarter profit

* Russia sales slowed in March but picked up in April (Adds detail on Russia, China, Italy sales)

MILAN, May 7 (Reuters) - Italian online retailer Yoox said on Wednesday it expected continued revenue and profit growth this year as it reported a 14.6 percent rise in net sales for the first quarter.

Yoox, which runs its own multibrand websites and powers online shops for brands including Armani and Yves Saint Laurent , said strong sales in Italy and the rest of Europe helped boost revenue to 126.5 million euros ($176 million), broadly in line with analysts' expectations.

Continued investment in technology and the impact of exchange rates weighed on net profit for the quarter. Profit was 0.9 million euros, down 13.4 percent from the year-earlier period, but the company said it expected growth at its top and bottom lines for the rest of the year.

"All of the group's key markets and both business lines are expected to contribute positively to ... growth" in sales and profits, the company said in a statement.

Yoox said it was seeing the benefit of its investments in China, where the introduction in February of its full range of brands helped drive sales there up 24 percent.

At home in Italy, where it makes 16 percent of sales, Yoox saw revenue rise 20 percent.

Despite the traditional perception of the Italian market as being behind the rest of Western Europe for internet use, Yoox said purchases on smartphones and tablets in Italy contribute 19 percent more to its revenue than in the rest of the world.

Company executives said on a conference call that sales growth in Russia slowed in March due to the crisis in Ukraine, but picked up in April, making them optimistic for the second quarter.

Trading in Russia has also been affected by currency volatility, but was nonetheless strong in January and February, Yoox said.

A Milan-based analyst said the company, which does not split out revenues from Europe outside Italy, makes around 5 percent of sales and just under 5 percent of profits in Russia.

Yoox said it had renewed its partnership to power an online store for fashion house DSquared2 for a further five years.

Growth in the company's main multi-brand business, which includes yoox.com, thecorner.com and shoescribe.com, continued to outpace growth in its monobrand business, which counts Italian cashmere king Brunello Cucinelli among its clients, by almost 3 percentage points. ($1 = 0.7183 Euros) (Reporting by Isla Binnie; Editing by Leslie Adler)