Richemont grows modestly and loses margin
Published: Friday, May 17th 2024, 07:51
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The jewelry and watch group Richemont closed the 2023/24 financial year, which ended in March, with an increase in sales. While the jewelry division excelled with its flagship Cartier, the weakening market environment recently weighed on the watch houses.
Sales of the Richemont Group, which includes brands such as Piaget and IWC in addition to Cartier, rose by 3 percent to 20.6 billion euros, excluding the online division YNAP, as the Group announced on Friday. Adjusted for currency effects, sales would have risen by 8 percent. Analysts had expected organic growth of 8.2 percent on average.
This means that Richemont's growth momentum slowed towards the end of the financial year. In the first nine months, the Group had still grown by 5 percent in the reporting currency, the euro, and by 11 percent in local currencies. Declining Swiss watch exports this year had pointed to the weakening market environment.
Operating profit from continuing operations, i.e. also excluding the online subsidiary YNAP, which is up for sale, fell by 5 percent to 4.79 billion euros. The corresponding margin shrank by 1.9 percentage points to 23.3%. Analysts had expected a figure of 23.5 percent.
Including YNAP, the bottom line was a net profit of 2.36 billion euros after 301 million in the previous year. At that time, high write-downs on the online business had a negative impact. Richemont is proposing a dividend of CHF 2.75 per public share (A share) to its shareholders. Most recently, 3.50 francs were paid out per share, although this included a special dividend of 1 franc.
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