Geneva (awp) – The luxury group Richemont recorded a sharp increase in its turnover in the first quarter of its staggered 2022/2023 financial year and dishonored analysts’ forecasts. Despite generally positive reviews, the stock price went down the drain.
From April to June, the receipts of the owner of the Cartier brand in particular were coated by 12% at constant exchange rates to 5.26 billion euros (5.13 billion Swiss francs), according to a press release published on Friday. The increase even reached 20% at the current rate.
Jewelry took 20% to 3.02 billion euros and watches 18% to 1.0 billion, still at the current rate. Online distribution swelled 8% to 691 million.
The results are clearly above the consensus forecast of analysts polled by AWP, who expected sales of 5.16 billion. Only online sales disappointed expectations.
In detail, turnover recorded its strongest growth in Japan, thanks to a jump of 75%. Recording an increase of 43%, sales in Europe also posted a good performance, supported by the return of American and Middle Eastern tourists. In France, the expansion has even reached a three-digit rate, emphasizes Richemont.
Poor performance in China
In the Americas region, sales increased by 41%. In the Asia-Pacific region, on the other hand, it contracted by 8%, due to the so-called zero-Covid policy of the Chinese regime.
A sign of the return of customers to the stores, the turnover achieved in the stores represented 58% of sales, against 55% in the first quarter of the previous financial year.
At the brand level, jewelry benefited from strong demand for items from Buccellati, Cartier and Van Cleef & Arpels. In watchmaking, the group based in the town of Bellevue evokes an outperformance of the brands A. Lange Söhne, Panerai and Vacheron Constantin.
Richemont also indicates that the “other activities” heading, whose sales increased by 36% to 600 million euros, essentially corresponds to clothing and accessories, with special mention for the brands Peter Millar (men’s fashion) and Delvaux (leather goods).
As of June 30, cash held 5.4 billion euros, against 3.6 billion a year earlier, which reflects the strong commercial activity as well as the replenishment of inventories, according to Richemont.
A tight-lipped company
Analysts were generally supportive but would have liked more comments from Richemont. “Solid results that confirm good trends in the sector, but unlikely to move stocks,” notes Zuzanna Pusz of UBS. Jewelery is gaining market share with the younger generation, writes Patrik Schwendimann, from ZKB, while maintaining his recommendation to overweight.
At Vontobel, Jean-Philippe Bertschy notes that strong American demand has made it possible to offset Chinese weakness. On the other hand, he regrets the absence of a forecast for the current financial year and of indications on a possible partnership with Farfetch. The analyst maintains “buy”, despite the headwinds ahead.
“We expect the conservative forecasts not to change much for the rest of the year given the uncertainties linked to the macroeconomic situation”, notes the analyst from Oddo BHF. The update does not contain much information and it seems that negotiations are continuing with Ynap, whose performance appears disappointing, he adds.
On the Swiss Stock Exchange, investors seemed to react according to the adage “sell on good news”. After falling more than 8% during the session, the Richemont title reduced its losses somewhat to end down 2.9% at 98.02 Swiss francs. The SMI index, for its part, gained 1.69%.
rq/vj/al