The ultra-cautious retailer easily beat analysts' expectations for the first half of the year.

But it said fears of further terrorist action meant people might spend less on luxury goods in the run up to Christmas.

Gucci shares were down 1.25 at 88 euros in afternoon trade on Tuesday on the Amsterdam stock exchange.

Nervousness

The group, which is the subject of a bid from Pinault- Printemps- Redoute (PPR), unveiled net profits of $139m (�94.7m) for the six months to July 31, compared to $128m in the same period last year.

Earnings per share estimates were slashed from $3 to between $2.60 and $3.

Chief executive Domenico De Sole said: "Before 11 September, we were ready to upgrade our earnings per share forecast to $3.15-$3.20 ... but now there's a lot of nervousness.

"The bottom line is very difficult to predict."

US sales had been the most affected by the attacks.

Sales at tourist destinations such as Hawaii and Las Vegas fell sharply and Gucci's ailing flagship store in New York closed for several days.

Dwindling Japanese tourists

US sales had also been hit by a fall in the number of Japanese tourists.