Most Recent Articles In Business
Latest Business Articles
- Luxottica Group Profits Rise 25.3 percent in Second Quarter
- Chinese Stock Crash Spreads To U.S. Markets
- Under Armour’s Game Plan: Faster Retail Expansion
More Articles By
LONDON — Last year’s weaker euro is set to boost year-end net profit by 30 percent at Compagnie Financière Richemont, parent of brands including Cartier, Van Cleef & Arpels and Alfred Dunhill.
This story first appeared in the April 24, 2013 issue of WWD. Subscribe Today.
The company said in an unscheduled statement on Tuesday that sales climbed 14 percent on a reported basis, and 9 percent on a constant currency basis, for the 2012-13 fiscal year ended March 31.
Richemont’s stock closed up 8.3 percent percent at 73.80 Swiss francs, or $79.02 at current exchange.
Richemont “A” shares are listed on the Swiss Stock Exchange, which requires companies to reveal any significant fluctuation in profits — up or down. Richemont will release its 2012-13 results on May 16.
Richemont said operating profit is likely to show an increase of about 18 percent compared with the previous year.
Thomas Chauvet, a luxury analyst at Citi, said Richemont’s expected sales figure of 10.1 billion euros, or $13.03 billion, is broadly in line with consensus estimates and with Citi projections, and pointed to a “reassuring acceleration” in the group’s fourth quarter. Chauvet said the projected operating profit figure was also broadly in line with consensus estimates.
As reported, Richemont’s third-quarter sales climbed 9.3 percent to 2.86 billion euros, or $3.72 billion, but fell short of analysts’ estimates. In its third-quarter trading update in January, Richemont also said it remained “unclear” how business patterns in Asia, which notched double-digit growth over the 2012-13 year, would evolve in the short term.
Citi also maintained its “buy” rating on the Richemont stock, which it says has been underperforming the broader sector by 4 percent on concerns about weaker trading in China.
“We think the market fails to acknowledge superior long-term earnings power (and high earnings quality), strength of the portfolio, coherent, long-term oriented strategy, limited M&A risks, stable management team and strong balance sheet,” Chauvet said in the report.