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LONDON — Compagnie Financière Richemont SA reported a 33 percent rise in third-quarter revenues to 2.11 billion euros, or $2.87 billion, from 1.59 billion euros, or $2.36 billion, in the same period last year.
This story first appeared in the January 18, 2011 issue of WWD. Subscribe Today.
The upswing in sales for the three months ended Dec. 31 was thanks to particularly high growth in the Asia-Pacific region, Richemont said, and the impact of strong sales at Net-A-Porter, which Richemont acquired last year. Stripping out currency fluctuations, sales for the three-month period grew 23 percent, while excluding the acquisition of Net-A-Porter, sales grew 19 percent.
“Richemont’s maisons performed well and saw good sales growth, particularly at the retail level, during the three-month period,” said Johann Rupert, executive chairman and group chief executive officer at Richemont.
Rupert added that in the month of December, sales grew by 17 percent at constant exchange rates, excluding the impact of the Net-A-Porter acquisition. Retail sales grew 43 percent at actual exchange rates during the period, to 1.07 billion euros, or $1.45 billion.
In terms of categories, sales at Richemont’s jewelry brands, which include Cartier and Van Cleef & Arpels, rose by 30 percent at actual exchange rates to 1.09 billion euros, or $1.48 billion, while sales for Richemont’s fashion brands, which include Alfred Dunhill, Chloé and now Net-A-Porter, rose 75 percent during the period to 260 million euros, or $353.6 million.
Asia-Pacific was the region that saw the strongest growth, with sales rising 57 percent at actual exchange rates to 772 million euros, or $1.05 billion, which Richemont said reflected “a continuation of the house’s expansion in that fast-growing region.”
Sales in Europe grew 20 percent at actual exchange rates, while sales in the Americas rose 27 percent. The impact of Net-A-Porter helped boost sales in both Europe and the Americas, Richemont said.
All dollar figures have been calculated at average exchange rates for the three-month period.
Luca Solca, senior research analyst at Sanford C Bernstein, described the results as “a punchy third-quarter trading update…supported by strong momentum across geographies and businesses and favorable exchange rates.”
Meanwhile, Thomas Chauvet, senior equity analyst at Citigroup, said he believed that “Richemont captures the attributes of a good, long-term growth story,” which he attributed to “Significant [emerging market] exposure, a premium brand portfolio and clear distribution strategy, alongside increased cost discipline, good cash-flow generation and a strong balance sheet.”
Still, Rupert said he was cautious about the company’s fourth quarter, which ends March 31.
“As indicated previously, higher comparative figures will make the final quarter of the financial year…more challenging,” he noted. “Gross margin is anticipated to be negatively affected by a stronger Swiss franc, given the group’s Swiss manufacturing base, and the planned changes to product lines at one of the group’s specialist watchmakers, which will be largely implemented during the coming quarter.”
Following the update Monday, Richemont’s shares closed down 2 percent on the Swiss stock exchange, at 55.45 Swiss francs, or $57.52, a share. Richemont is slated to announce its full-year results May 19.