Jewelry, Fashion and Japan Boosted Richemont in Q3 – WWD

Compagnie Financière Richemont reported a 5% increase in sales during its holiday sales. Its jewelry and fashion maisons offset watch weaknesses and poor consumer traffic in mainland China.

Revenues totaled €5.4 billion for the three months ended December 31st. Excluding the impact of Russia, Group sales increased by 7% at constant exchange rates.

Equity analysts at Bernstein and RBC said the result was 5% below consensus expectations.

The first deal update for 2023 by Europe’s three largest luxury conglomerates shows that demand for luxury goods is weakening amid high comps and turmoil in China late last year.

In contrast, Richemont’s third quarter revenues increased 43% in Japan, 19% in Europe and 10% in the Middle East. In the Middle East, the company highlighted the benefits of the World Cup in Qatar and “sustained local demand”.

At constant exchange rates, sales in the Americas increased 3%. Richemont attributed this “moderate” growth to “a larger share of purchases made abroad given the strong US dollar”.

Europe’s strength “reflects continued strong local and tourist demand, particularly from the United States and the Middle East … the performances of France, Italy and Switzerland are particularly noteworthy”.

Asia Pacific sales declined 9% at constant exchange rates. Strong performances in South Korea, Australia and Singapore only partially offset sales declines in mainland China, Hong Kong and Macau.

“The significant increase in COVID-19 has negatively impacted customer traffic and has led to reduced opening hours or temporary closure of points of sale for boutiques in mainland China due to unavailability of staff, and during the period covered. Sales were down 24%,” said Richemont.

The Group’s flagship jewelery brands Cartier, Van Cleef & Arpels and Buccellati grew by 8% over the three months, while specialist watchmakers such as Baume & Mercier, IWC Schaffhausen, Jaeger-LeCoultre and Panerai fell by 5%. and Vacheron Constantin.

The company said the Asia-Pacific region typically generates half of Richemont’s watch sales, with the region registering double-digit declines.

Richemont notes increased sales at most of Alaia and Peter Miller’s fashion and accessories Maisons, including Alaia and Peter Miller, including AZ Factory, Chloé, Delvaux, Dunhill, Montblanc, Purdy and Serapian. Sales in the ‘Other’ business area increased by 6%. and Watchfinder & Co.

YNAP’s results were announced Tuesday as a discontinued operation, following its decision last August to sell a majority stake in loss-making Yoox Net-a-porter Group to Farfetch and Alabbar. His YNAP sales in the third quarter he fell 6%.

Richemont noted that its net cash position at the end of the year amounted to EUR 5.5 billion. The group is due on May 12th to report full results for the fiscal year ending March 31st.

LVMH Moët Hennessy Louis Vuitton will report its fourth quarter and full year results on January 26th, and Kering on February 15th.

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