Richemont Posts Slowing Sales Growth Amid Challenging Environment -- Update

By Andrea Figueras

Compagnie Financiere Richemont posted a slowdown in sales growth for the first-half of fiscal 2024 due to inflation, slowing economic growth and geopolitical tensions that hurt customer sentiment.

The Swiss-based luxury company, which counts jeweler Cartier among its brands, said on Friday that it made net profit from continuing operations of 2.16 billion euros ($2.30 billion) for the first six months to Sept. 30, compared with EUR2.11 billion in the year-earlier period. Including discontinued operations, the company swung to a net profit of EUR1.505 billion, compared with a loss of EUR766 million.

The company booked sales of EUR10.22 billion, up 6% at current exchange rates and 12% at constant currency, showing a normalization in growth as first-quarter sales increased 19% at constant exchange rates. Operating profit fell 2% to EUR2.655 billion.

First-half results came below analysts' expectations that forecast group sales of EUR10.34 billion and operating profit of EUR2.88 billion, according to FactSet.

The core jewelry division, home to Cartier and Van Cleef & Arpels, reported sales of EUR6.95 billion, up 10% at current exchange rates.

"We have seen a broad-based normalisation of market growth expectations across the industry," Richemont Chairman Johann Rupert said. Looking ahead, Rupert noted a volatile environment and global uncertainties, but said that he has confidence in the group's long-term prospects.

The company appointed Karlheinz Baumann, group director of operations, to the senior executive committee effective immediately.

Furthermore, Richemont said that it obtained clearance from regulatory authorities to sell a stake in online platform Yoox Net-A-Porter to Farfetch, although the completion of the transaction remains subject to certain other conditions, it said.

Write to Andrea Figueras at [e-mail]

(END) Dow Jones Newswires

November 10, 2023 02:27 ET (07:27 GMT)

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