News

Jul 22, 2019

Richemont’s Sales Increase 12% For Q1 FY 2020; Jewellery Maisons Perform Strongly

Announcing its trading update for the first quarter ended June 30, 2019 (the period) leading retailer of luxury goods Richemont reported that sales for the quarter increased by 12% at actual exchange rates and by 9% at constant exchange rates compared to the same period of the previous year. 

The Group reported total sales worth €3,740 million for the period April to June 2019; as compared to sales worth €3,344 million reported for the same period of the previous year (this includes sales of YOOX NET-A-PORTER Group and Watchfinder, which have been consolidated in the Group’s financial statements since  May 1, 2018 and June 1, 2018 respectively).

“Excluding Online Distributors, sales rose by 6% at actual exchange rates and by 3% at constant exchange rates,” the Company stated.

Looking at the Group’s performance regionwise, Europe reported sales worth €1,072 million for the period as compared to €958 million in the prior year’s first quarter; marking a 12% growth in terms of both, constant exchange rates and actual exchange rates.  Sales for the Asia-Pacific region were the highest at €1,423 million, as against sales touching €1,268 million for the same period last year; thus registering an increase of 10% at constant exchange rates and 12% at actual exchange rates.  While the Americas accounted for sales amounting to €698 million for the period as against €600 million for the same period of the previous year, registering an increase of 10% at constant exchange rates and 16% at actual exchange rates; sales in Japan stood at €298 million compared to €255 million in the same period of the previous year, marking a growth of 8% at  constant and 13% at actual exchange rates. Sales in the Middle East and Africa region, however, fell to €249 million from €255 million achieved in the same period of last year; marking a decrease of 7% at constant exchange rates and 2% at actual exchange rates.   

In terms of channels, retail sales for the period amounted to €1,851 million as compared to sales worth €1,694 million notched for the same period of prior year; marking an increase of 6% at constant exchange rates and 9% at actual exchange rates. Online retail sales of €648 million as compared to €420 million in the same period of the previous year saw a growth of 50% at constant exchange rates and 54% at actual exchange rates. Sales of the wholesale distribution channel amounted to €1,241 million as compared to sales worth €1,230 million in the same period of the previous year, marking a decrease of 2% at constant exchange rates and an increase of 1%  at actual exchange rates.

Considered by business segments, one sees the Jewwellery Maisons performing strongly with sales of €1,827 million as against sales of €1,694 reported for the same period of the prior year, registering a growth of 7% at constant exchange rates and 10% at actual exchange rates. Specialist Watchmakers on the other hand notched sales worth   €823 million a against sales of €818 million in the prior year’s comparable period, marking a decrease of 2% at constant exchange rates and an increase of 1% in actual exchange rates.

The Company, explaining changes to its reporting practice stated: “Starting with the financial year ending 31 March 2020, the Group provides a trading update for its first quarter ended 30 June. Sales for the first five months will therefore no longer be reported in September.”

Also, as the previous year’s first quarter report included two months of sales for YOOX NET-A-PORTER GROUP and one month of sales for Watchfinder & Co., comparing the two years on full quarter basis shows spiked growth in double digits.

“In order to provide more meaningful comparison to the prior year period, the comments below relate to current period sales excluding Online Distributors,” Richmeont said.

Accordingly, the Company summed up saying: “During the quarter under review, sales expanded in Asia Pacific and Japan, showed modest growth in the Americas, and contracted in Europe and the Middle East and Africa. In Europe, sales were 1% lower compared to the prior year period as good momentum at the Jewellery Maisons was more than offset by a slower performance in the other business areas, with contrasted performance among markets. In Asia Pacific, the 9% increase in sales reflected double-digit sales growth in its key markets, with the exception of Hong Kong. Growth was led by mainland China, where strong sales were supported by lower VAT and custom duty rates; sales in Hong Kong retreated, additionally impacted by the relative strength of the Hong Kong dollar and the recent street protests. Sales in the Americas rose by 1% as growth at the Jewellery Maisons and the Other business area outweighed lower sales at the Specialist Watchmakers. In Japan, the 6% progression in sales was driven by good domestic and tourist spending, and the full year impact of recently opened directly operated boutiques. Unfavourable currency movements and the severance of selected wholesale relationships weighed on sales in the Middle East and Africa, which decreased by 12% over the period. 

“Following strong double-digit growth in the prior year period, the retail channel registered a 6% increase in sales, driven by the Jewellery Maisons and to a lesser extent the Specialist Watchmakers. Ongoing cautious watch inventory management and distribution optimisation initiatives continued to negatively impact the wholesale channel, which posted a 2% decrease in sales. The online retail channel delivered a strong double digit increase in sales.”

The Group’s net cash position at June 30, 2019 amounted to € 2.4 billion (2018: € 2.2 billion).