Dive Brief:
- Compagnie Financière Richemont today reported 14% sales growth for Q1, which ended June 30, with total revenue rising to 5.3 billion euro year over year, or $5.9 billion at current exchange, driven in part by a 40% rebound in the Asia Pacific region, according to a Monday earnings report.
- However, in the Americas there was a 2% sales drop as a result of lower wholesale and retail sales in the region. As a result, Richemont shares were down 8% in morning trading.
- In Europe, sales rose 11% year over year, which the company attributed to strong domestic demand and robust tourist spending, especially from American, Middle Eastern and Chinese customers. Meanwhile, Japan saw 14% sales growth, and sales in the Middle East and Africa were up 15%, which the company said was due to increased domestic and tourist spending in Dubai.
Dive Insight:
Watch and jewelry sales were particularly strong and helped lead Richemont’s retail sales, which grew 24% across all business areas. The company added that its online retail sales grew by 2%, and wholesale was up 11% overall.
The company also noted that much of its growth was driven by retail, which accounted for 68% of its group sales, with DTC sales representing 74% of that.
It also noted that YOOX Net-a-Porter was now listed as ‘discontinued operations,’ posting a 10% sales reduction and citing a “globally challenging environment for digital distribution pure players.” Richemont sold Net-a-Porter to Farfetch last year.
Richemont owns three jewelry houses — Cartier, Van Cleef & Arpels and Buccellati — and combined, those represented a 24% sales increase. Watch sales grew at 10%, and its “other” category, which represents its fashion and accessories businesses, grew at 6%. Those brands include Montblanc, Chloé, Alaïa, Delvaux and Dunhill.
This year, the company has seen a few changes in its fashion ranks, including the departure of Chloé designer Gabriela Hearst earlier this month, and the hiring of Simon Holloway as creative director at Dunhill in April.
As of June 30, Richemont’s net cash position was 6.6 billion euro, excluding YOOX.
