Richemont’s share price falls after lower first quarter sales in the US

A Cartier handbag on display at a Cartier store, operated by Richemont, in Lugano, Switzerland. Photo: Bloomberg

A Cartier handbag on display at a Cartier store, operated by Richemont, in Lugano, Switzerland. Photo: Bloomberg

Published Jul 18, 2023


The share price of luxury goods group Compagnie Financière Richemont SA (Richemont), a top performer on the JSE this year, slumped over 9% yesterday morning in spite of reporting a strong overall quarterly sales performance, but lower sales in the Americas.

By the afternoon, the share price was 8.39% lower at R2950.61, however the price was still 65% up on the share price on the same day a year ago.

The group said it had made a “solid start to the financial year with 14% sales growth at actual exchange rates (+19% at constant exchange rates) in its first quarter to June 30 driven by higher sales across almost all regions and distribution channels and all business areas, at actual exchange rates.”

According to CNBC, the share price decline came after Richemont had reported declining sales in the US and a strong rebound in Asia. European stock indices were marginally lower yesterday morning as well.

European stocks, according to reports, fell due to China reporting second-quarter gross domestic poduct growth of 6.3% versus market estimates of 7.3%, while retail sales and industrial production data failed to meet expectations.

The lower second quarter sales in the Americas division is in stark contrast to the region’s performance in 2022 , as, according to the annual report, sales in the Americas increased 79%, with Asia Pacific building on its strong performance in the prior year with sales growth of 32%.

Richemont said yesterday the from April to June, growth in Asia Pacific climbed 32% over the same period a year before at actual exchange rates, followed by the Middle East & Africa Europe with 12% growth on the same basis, 10% growth in Europe, 6% growth in Japan, and -4% in the Americas.

The Switzerland-listed group with a secondary listing on the JSE said yesterday there had been a strong rebound in Asia Pacific, which had more than offset muted sales in the Americas.

Growth was driven by retail, now 68% of group sales, with direct-to-client sales representing 74% of sales.

The group’s Jewellery Maisons division led the growth across all business areas (19% at actual exchange rates), followed by the Specialist Watchmakers (6% at actual exchange rates) and Other (including the F&A Maisons: 5% at actual exchange rates).

By distribution channel, online retail growth declined 1% at actual currencies values, income from the wholesale and royalty channel was up 8%, while growth in retail distribution amounted to 19%.

The prior-year period comparatives was re-presented as YNAP results were presented as ‘discontinued operations’.