By Andrea Figueras
Luxury company Compagnie Financiere Richemont has reported a slowdown in sales growth for the first half of fiscal 2024, citing factors such as inflation, slowing economic growth, and geopolitical tensions that have impacted customer sentiment.
In the first six months to September 30, Richemont recorded a net profit from continuing operations of 2.16 billion euros ($2.30 billion), compared to 2.11 billion euros in the same period of the previous year. Including discontinued operations, the company achieved a net profit of 1.505 billion euros, a significant improvement from the loss of 766 million euros.
The company’s sales reached 10.22 billion euros, showing a 6% increase at current exchange rates and a 12% increase at constant currency. However, this growth rate reflects a normalization compared to the first quarter, which saw a sales increase of 19% at constant exchange rates. Operating profit experienced a slight decline of 2%, amounting to 2.655 billion euros.
Analysts had projected group sales of 10.34 billion euros and an operating profit of 2.88 billion euros, according to FactSet, indicating that Richemont’s first-half results fell short of expectations.
The core jewelry division, which includes renowned brands Cartier and Van Cleef & Arpels, delivered sales of 6.95 billion euros, showing a growth rate of 10% at current exchange rates.
Commenting on the results, Richemont Chairman Johann Rupert acknowledged a normalization of market growth expectations within the industry. Looking ahead, he expressed confidence in the group’s long-term prospects despite a volatile environment and global uncertainties.
To strengthen its leadership team, Richemont appointed Karlheinz Baumann, group director of operations, to the senior executive committee, effective immediately.