Richemont posts H1 loss, while sales increase by 24 percent
In the first six months of the year, Richemont reported sales increase of 24 percent at actual exchange rates and 16 percent at constant exchange rates to 9.7 billion euros.
Operating profit from continuing operations increased by 26 percent to 2.7 billion euros, delivering improved operating margin of 28.1 percent. The company recorded a 40 percent increase in profit for the period to 2.1 billion euros and loss of 766 million euros linked to the sale of YNAP assets.
“It is highly uncertain how the political, economic and social landscapes will evolve in Europe and in our other key markets. We only know that we will likely face volatile times ahead as central banks seek to rein in inflation while governments try to manage severe cost of living pressures,” said Johann Rupert, chairman of Richemont Group.
However, Rupert added that the group is in the fortunate position of being in good health, with a clear strategy, highly desirable and enduring creations, strong maisons, professional teams and a robust balance sheet.
Review of Richemont’s first half results
Richemont’s jewellery maisons achieved a 24 percent sales growth at actual exchange rates and 16 percent at constant rates, delivering a 37.1 percent operating margin.
Specialist watchmakers expanded sales by 22 percent at actual exchange rates and 13 percent at constant exchange rates and achieved 24.8 percent operating margin, while other business area, predominantly F&A maisons grew 27 percent at actual exchange rates, 19 percent at constant exchange rates and generated a 4.3 percent operating margin.
This performance, the company said, reflected double-digit sales growth in all regions excluding Asia Pacific where sales grew by 3 percent at actual exchange rates as the impact of recurring temporary boutique closures in mainland China was offset by robust performances in other Asian markets, in addition to positive foreign exchange impacts. In constant currencies, sales in the Asia Pacific region returned to growth during the second quarter but contracted by 5 percent for the six-month period to September 2022.
In the Americas and Europe, sales rose by 40 percent and 45 percent respectively, at actual exchange rates. European sales, in particular, benefited from the resumption of international tourism, primarily from North American and Middle Eastern clients. Sales through the group’s directly operated stores network were up by 30 percent during the period, driven by growth in all regions. Online retail sales, now excluding sales made by YNAP, grew by 19 percent while wholesale sales increased by 14 percent.