The Group’s operating profit from continuing operations declined by 17 per cent to €2.2 billion (~$2.37 billion) (-12 per cent at constant exchange rates) in H1, yielding an operating margin of 21.9 per cent. Profits from continuing operations stood at €1.7 billion, reflecting a 20 per cent decrease year-on-year. The Group incurred a significant loss of €1.3 billion from discontinued operations, primarily attributed to a non-cash write-down of Yoox Net-A-Porter (YNAP) assets. Richemont maintained a solid net cash position of €6.1 billion, supported by cash flow from operating activities amounting to €1.2 billion, it said in its financial statement.
Richemont reported resilient performance for H1, with sales reaching €10.1 billion (~$10.89 billion), a 1 per cent decline at actual exchange rates but stable at constant rates.
Operating profit dropped 17 per cent to €2.2 billion, impacted by foreign exchange issues and reduced activity in Asia Pacific, particularly China.
Direct-to-client sales comprised 76 per cent of total sales.
The Group’s sales performance varied across regions during the period under review. Sales in the Americas surged by 10 per cent, reinforcing the US as the largest individual market. Japan was a standout performer, with sales climbing 32 per cent. Europe and the Middle East & Africa both posted robust growth, while sales in the Asia Pacific region saw a significant decline of 19 per cent, largely due to reduced activity in China.
Sales in other business areas rose by 4 per cent, though the segment reported an operating loss of €52 million (~$56.04 million), with Fashion & Accessories Maisons posting a marginal operating margin of -2 per cent.
Richemont’s results reflect strategic investments in distribution and manufacturing, enhancing direct-to-client sales, which now account for 76 per cent of total sales. However, the Group’s profitability was impacted by negative foreign exchange movements and the underperformance in the Asia Pacific region. A notable development was the non-cash write-down of €1.2 billion related to the revaluation of YNAP’s assets, as part of an upcoming strategic partnership with Mytheresa, the release added.
Gross profit for the period amounted to €6,771 million, or 67.2 per cent of sales. In absolute terms, gross profit decreased by 3 per cent. Operating profit in H1 decreased by 17 per cent compared to the prior year period to €2,206 million, or 21.9 per cent of sales.
Net operating expenses increased by 6 per cent compared to the prior-year period. Selling and distribution expenses also increased by 6 per cent, amounting to 26.4 per cent of sales in the current period compared to 24.6 per cent a year ago, reflecting network expansion in an inflationary context. Profits for the period from continuing operations, at €1,729 million, was 20 per cent lower than the prior-year period.
The company’s earnings per share (1 ‘A’ share/10 ‘B’ shares) amounted to €0.779 on a diluted basis. Excluding YNAP, diluted earnings per share (1 ‘A’ share/10 ‘B’ shares) from continuing operations were €2.943.
Fibre2Fashion News Desk (KD)