During the period under review, net profit increased from 1.51 billion to 457 million.
The Geneva luxury group Richemont posted a decline in performance in the first half of 2024/25 of its staggered financial year ending at the end of September. Both sales and profitability declined.
During the period under review, turnover contracted by 1% year-on-year to 10.08 billion euros (9.5 billion francs), the group announced on Friday in a press release. Current operating profit plunged 17% to 2.21 billion, while operating margin collapsed 410 basis points to 21.9%.
“The group’s sales were solid in most regions, which allowed us to compensate for weak demand in China, which as I anticipated, will take time to return to normal,” underlines its president Johann Rupert.
The Americas and Japan showed growth of 10%, respectively 32% in sales at real exchange rates. In the Asia-Pacific region, on the other hand, sales collapsed by 19% – by 27% even for the key markets of China, Hong Kong and Macau.
This slowdown is hitting the watchmaking sector in particular. In this division, brands saw their sales plunge by 17% (-16% at constant exchange rates) to reach 1.66 billion. Operating profit collapsed by 59% to 160 million.
The jewelry division fared better, recording growth in its turnover of 2% (+4% at constant exchange rates) to 7.1 billion euros and an operating profit down 5% to 2.3 billion.
The “other” sector of activity, which notably includes fashion houses and accessories, grew by 4% at real and constant exchange rates.
Ultimately and for the group as a whole, net profit went from 1.51 billion to 457 million and current profit fell by 20% to 1.73 billion.
The loss of 1.3 billion euros in respect of assets held for sale is the combination of the result of Yoox-net-a-porter (YNAP) for the first six months of the year and a value adjustment of 1.2 billion on YNAP’s net assets, without impact on cash flow. This stood at 6.1 billion at the end of September.
These figures are below the expectations of analysts surveyed by AWP who anticipated 1.88 billion for current profit. Turnover was expected at 10.18 billion euros, operating profit at 2.33 billion for a related margin of 22.9%.
As usual, Richemont is very reserved about its prospects. Its president says he is only “cautious in such a context of uncertainty”, but “confident in our ability to navigate the current and future cycles% while continuing to create value for shareholders.
