(AOF) – The Swiss luxury group Richemont fell by 5.73% to 106.10 Swiss francs in Zurich. This fall – the most significant in the SMI – is the consequence of its disappointing results in the first half of its 2023-2024 financial year in its watchmaking division. This recorded a drop in sales of 3% over one year, to 1.987 billion euros, Richemont indicated. Strongly impacted by foreign exchange, the operating margin fell by 510 basis points to 19.7%.
In the wake of this poor performance, Hermès, LVMH and Kering lost 2.04%, 4.59% and 3.80% respectively.
Over the first part of the year, turnover increased by 12% at constant exchange rates to 10.2 billion euros. Current operating profit amounted to 2.7 billion euros, up 15% at constant exchange rates. However, it came out below the consensus of 2.87 billion and fell 2% in published data.
“Our growth slowed slightly in the second quarter due to inflationary pressures, slowing economic growth and geopolitical tensions which began to impact customer confidence,” the company commented.
Commenting on this biannual publication, Bernstein emphasizes that it raises fears that the high end is not immune to the trend towards normalization of growth.
For its part, UBS remains Buy on the Richemont stock with an unchanged price target of 147 Swiss francs. The analyst explains that the positive point of this publication is the better than expected performance of the Jewelry Houses division, which recorded growth of 9% in the second quarter and an operating margin of 35.5% in the first half.
For its part, Stifel reiterates its Buy recommendation on Richemont. The broker explains that “the gross margin in the first half was low (68.2% against 68.5% consensus) and the operating profit of 2.66 billion euros (margin of 26%) was lower 7% to the consensus. The profitability of the Jewelry Houses, at 35.5%, was in line with its forecasts, but lower than the consensus of 36.4%. The broker expects, as a first estimate, that the 2024 Ebit consensus for Richemont will fall by 4-6%.
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