Richemont’s Strong Earnings Surpass Estimates as China Sales Rebound, Chairman Confident in Future Growth
In the fiscal year ending in March, Richemont reported operating profit of €5.03 billion ($5.5 billion) and a 14 percent sales increase at constant currencies.
Richemont, the Swiss luxury goods company known for its ownership of the Cartier brand, surpassed analysts’ expectations with its earnings report as sales in China rebounded following the relaxation of Covid Zero policies.
In the fiscal year ending in March, Richemont reported operating profit of €5.03 billion ($5.5 billion) and a 14 percent sales increase at constant currencies. These figures exceeded analysts’ estimates and led to a record high stock price in Geneva, with a rise of up to 5.9 percent.
Johann Rupert, the billionaire chairman of Richemont, acknowledged that economic volatility and political uncertainty are likely to persist. However, he expressed confidence that the company’s brands are well-positioned to meet strong demand, primarily driven by Chinese customers resuming travel. Rival luxury companies LVMH and Prada have also reported better-than-expected revenue in the first quarter due to increased demand from China.
Rupert noted that Chinese consumers have been cautious about spending following the relaxation of Covid rules and that the company does not anticipate a rebound in demand in China as strong as that seen in the United States after the lifting of pandemic measures. While individual Chinese travelers have resumed their journeys, group trips have not yet recovered due to high flight costs, according to Rupert.
During a call with reporters, Rupert expressed concerns about a potential downturn in the US due to an upcoming credit contraction.
Analyst Jean-Philippe Bertschy from Vontobel highlighted the potential for brands with strong pricing power, such as Richemont’s Cartier, Van Cleef & Arpels, and Vacheron Constantin, to emerge as winners in the coming months. Bertschy noted that Richemont is well-positioned to gain further market share.
Rupert dismissed suggestions that larger competitor LVMH had plans to acquire Richemont. He stated that while he frequently engages in discussions with LVMH Chairman Bernard Arnault, Richemont is not for sale, emphasizing mutual respect for each other’s independence.
Richemont also announced its decision to repurchase up to 10 million A shares, representing 1.7 percent of the company’s capital. The shares will be held in treasury to offset awards granted to executives and employees under the company’s long-term incentive plan. At the current share price, this stake would be valued at 1.5 billion francs ($1.7 billion).
Furthermore, Fiona Druckenmiller, founder of FD Gallery, a boutique specializing in vintage and pre-owned jewelry in New York, is set to join Richemont’s board of directors. Her husband, Stan Druckenmiller, is the billionaire founder of Duquesne Family Office and managed funds for billionaire George Soros for over a decade. Richemont aims to have one-third of its board members be women at the next shareholder meeting.
Metro1 year ago
23-Year-Old Suspect Apprehended for Rape and Murder of OAU Graduate in Ogun State
Business4 months ago
Central Bank of Nigeria Directs Customers to Reject Old Naira Notes from Banks
Metro1 year ago
Breaking: Like Deborah Samuel, Commercial Motorcyclists Beat, Burn Sound Engineer To Death In Lagos Due To Disagreement Over N100 Balance (Photos)
Metro8 months ago
Police In Show Of Force Ahead Of Peter Obi’s Rally In Lekki (Photos)
Metro2 months ago
Party Agent Apprehended in Oshodi with N3.2 Million Cash
News8 months ago
Nigeria’s Eligible Forward, Folarin Balogun Opens Up On Life At Arsenal
News8 months ago
Aisha Buhari Gets New Appointment In Tinubu/Shettima Campaign Team
News1 year ago
SHOCKING! DHL Plane Breaks Into Two During Emergency Landing (Video)