Richemont Group expects 80 per cent profit lift
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With demand picking up for high-end watches, Swiss luxury goods company Richemont Group says it expects an 80 per cent increase in net profit for the six months to the end of September.
After a collapse of the Hong Kong market, Richemont was forced to buy back excess inventory, cut jobs and replace most of its brand chiefs. The buyback mainly impacted the Cartier and Van Cleef & Arpels brands.
However, trading has improved says Richemont, whose brands also include Piaget and Vacheron Constantin. Constant-currency sales rose 12 per cent in the six months, and by 10 per cent on a reported basis, compared with a year earlier.
Operating profit is likely to rise 45 per cent, reflecting the non-recurrence of the exceptional inventory buybacks in the previous year, as well as positive currency movements, says Richemont.
Questions & Answers
Q.Which of Richemont's brands were most affected by the inventory buyback in Hong Kong?
Which of Richemont's brands were most affected by the inventory buyback in Hong Kong?
The inventory buyback primarily impacted the Cartier and Van Cleef & Arpels brands. This action followed a collapse in the Hong Kong market.
Q.What is the expected increase in Richemont's operating profit for the six months?
What is the expected increase in Richemont's operating profit for the six months?
Richemont anticipates a 45 per cent rise in operating profit. This is attributed to the absence of the exceptional inventory buybacks from the previous year, alongside positive currency movements.
Q.How much did Richemont's sales grow in constant currency over the six-month period?
How much did Richemont's sales grow in constant currency over the six-month period?
Constant-currency sales for Richemont rose by 12 per cent in the six months compared to the previous year. Sales grew by 10 per cent on a reported basis.
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